1 Tuesday, 23 April 2024 2 (9.44 am) 3 MR BLAKE: Good morning, sir, can you see and hear me? 4 SIR WYN WILLIAMS: Yes, thank you. 5 MR BLAKE: This morning we are going to hear from Susan 6 Crichton and I should just say before we start that we 7 are going to trial a new break system where we're going 8 to have two breaks in the morning, one around 11.00 and 9 one around 12.00. 10 SIR WYN WILLIAMS: I'm very grateful, Mr Blake. Thank you. 11 MR BLAKE: Thank you. 12 SUSAN ELIZABETH CRICHTON (sworn) 13 Questioned by MR BLAKE 14 MR BLAKE: Thank you very much. Can you state your full 15 name, please? 16 A. Susan Elizabeth Crichton. 17 Q. Ms Crichton, you should have in front of you a bundle of 18 documents that contains your witness statement. 19 A. I do. 20 Q. Can I ask you to have a look at that witness statement. 21 It should be dated 30 January 2024? 22 A. Correct. 23 Q. It has the Unique Reference Number WITN00220100. Could 24 I ask you, please, to turn to the final substantive 25 page, that's page 107? 1 1 A. Yes. 2 Q. Can you confirm that that is your signature? 3 A. So this was signed on Docusign. 4 Q. Thank you very much, and can you confirm that that 5 statement is true to the best of your knowledge and 6 belief? 7 A. It is true to the best of my knowledge and belief. 8 Q. I believe there are some small corrections you'd like to 9 make within the text? 10 A. That's correct, yes. Do you want me to go through 11 those? 12 Q. Absolutely. 13 A. So paragraph 47: the penultimate line, "3939" should be 14 amended to "39". 15 Paragraph 77: line 2, delete the "the" before 16 Horizon. 17 The heading preceding paragraph 95: "Initial 18 Response" needs an extra "s" in response. 19 Paragraph 193, line 4: "they" should be "the". 20 Paragraph 260 line 8: "long-term issue" should be 21 "short-term issue". 22 "Paragraph 260, the penultimate line: "Altman" is 23 struck through and should be reinstated. 24 Q. Thank you very much. That statement is now in evidence 25 and will be uploaded on to the Inquiry's website 2 1 shortly? 2 Also before we start, I believe there's something 3 else you'd like to say? 4 A. Yes, thank you. 5 So I want to begin by saying how -- to all those 6 that have suffered, families, friends, subpostmasters, 7 Crown Office workers, that I am truly sorry for the 8 suffering caused to you and your families. I wish that 9 things had been resolved more quickly and, again, I'm 10 very sorry that they haven't been. I'm here today to 11 give my evidence to the Inquiry establishing the facts 12 and to try and ensure that something like this never 13 happens again, thank you. 14 Q. Thank you very much. By way of background you were 15 admitted as a solicitor in 1985; is that correct? 16 A. Yes. 17 Q. You worked for a number of companies before joining the 18 Post Office: a subsidiary of Midland Bank; Avco Trust 19 Limited; GE Consumer Finance, where you ultimately 20 became General Counsel of Europe, Middle East and 21 Africa; and also Skandia International, where you were 22 Head of Risk and Compliance; is that correct? 23 A. That's correct but, in relation to the Midland Bank, 24 I wasn't a qualified solicitor; I was a legal graduate. 25 Q. Thank you. You joined the Post Office in 2010 as Head 3 1 of Legal? 2 A. That's correct. 3 Q. You've made clear in your witness statement you didn't, 4 at that time, have any experience in criminal law and, 5 indeed, you've said in your statement that the job 6 description was for a technically strong and highly 7 commercial lawyer; is that correct? 8 A. That is correct, yes. 9 Q. You were the Post Office's first Head of Legal? 10 A. It was badged that way because it was to move forward to 11 the separation. The role had been filled previously but 12 it was part of the R&D Legal Team. 13 Q. Thank you and you had a number of other badges during 14 your time, those included Company Secretary for a brief 15 period between January 2010 and July 2011? 16 A. That's correct. 17 Q. You became Legal and Compliance Director in April 2012 18 on separation from the Royal Mail? 19 A. That's correct. 20 Q. At that time and from then on you had a direct line of 21 reporting to Paula Vennells, the CEO? 22 A. Yes, that's right. 23 Q. Mike Young is a name we'll see, he was the Chief 24 Operating Officer of the Post Office -- 25 A. Yes. 4 1 Q. -- and you've said in your witness statement, and we'll 2 come to it, he was responsible for various IT matters? 3 A. Correct. 4 Q. But when he left in 2012, you were assigned 5 responsibility for the Security Team as well? 6 A. Yes, I think I say in my statement that we'd started to 7 look at and think about the culture of the Post Office 8 at that time and there was a view that we should relook 9 at Security and its role within the organisation. 10 Q. That fell, from 2012, within your remit? 11 A. That's correct. 12 Q. For some time you're also HR and Corporate Services 13 Director, is that from September 2012? 14 A. I'm sorry, yes, I think it was around that time. 15 Q. How long were you in that role for? 16 A. That would have been for just under a year because 17 I think -- I went back to General Counsel or Legal 18 Compliance Director in July 2013. 19 Q. Absolutely. So from July 2013 until your departure, you 20 were then called General Counsel? 21 A. That's correct. 22 Q. But, before that, you had various wide areas of 23 different responsibilities? 24 A. That's correct. 25 Q. When did you leave the Post Office? 5 1 A. So I left at the end of November 2013, in the sense of 2 I had actually left the business, if you will. 3 An announcement was made at the end of September 2013. 4 I think, as I say in my statement, I was on holiday for 5 much of October and went in briefly to do a handover and 6 then during November I was on gardening leave. 7 Q. Thank you. After that, you left and joined Lloyds TSB 8 where you worked until 2018? 9 A. That's right, when I retired. 10 Q. Thank you. I'm going to ask you various questions about 11 corporate structure the use of external lawyers and 12 various other topics in due course, probably this 13 afternoon but I'm going to start this morning broadly 14 chronologically, looking at bugs, errors and defects and 15 also the involvement of Second Sight. 16 In terms of knowledge of bugs, errors and defects, 17 perhaps I can start with your witness statement. That's 18 WITN00220100. Can we start, please, on page 6. Thank 19 you. If we look at paragraph 16 at the bottom of 20 page 6, you say there: 21 "Until his departure in 2012, Mike Young was the 22 [Post Office] Chief Operating Officer. His 23 responsibilities included IT and change procedures, cash 24 in transit, security and procurement. When Mr Young 25 left, I was assigned responsibility for the Security 6 1 Team." 2 If we could please move on to page 10, paragraph 27. 3 Can you assist us with exactly when Mr Young left, at 4 all? 5 A. So from looking through the documentation I don't recall 6 exactly but I think it must have been sometime in March 7 2012. I wasn't sure whether it was before or after 8 separation. 9 Q. Thank you. Paragraph 27 is in the context of the 10 Computer Weekly article and it says there, as follows. 11 It says: 12 "Regarding any awareness of the Board and/or Senior 13 Management Team of the presence of [bugs, errors and 14 defects] highlighted in the article, my understanding 15 was that the responsibility for investigating such 16 matters would have been with Mr Young. His remit 17 included oversight and supervision of [the Post Office] 18 IT functions." 19 Moving, please, to paragraph 36, page 13. In this 20 paragraph you address an article that's published in 21 Private Eye and you say: 22 "The response ... at the Executive Meeting shortly 23 following the publication of the article by Private Eye 24 ... was along the lines that there were no systemic 25 issues with the Horizon system and was given by Mr Young 7 1 who had oversight of IT as part of his remit." 2 If we go over the page, paragraph 37. You say there 3 that: 4 "[You] understood that Mr Young had a detailed 5 understanding of the Horizon system and close knowledge 6 of its operational function." 7 The next paragraph, 38: 8 "... the Executive Team became aware of allegations 9 against the Horizon system in the context of complaints 10 received from [subpostmasters] or MPs ... When 11 an allegation or complaint arose, it was my 12 understanding that the IT and Network Teams would 13 consider the matter and would test the system to the 14 extent necessary to assure themselves regarding the 15 concern raised." 16 Are we to understand it from those passages and 17 overall from your witness statement, that you see 18 Mr Young, at least between 2010 and 2012, as being 19 responsible for the investigation and communication to 20 the executive of matters relating to bugs, errors and 21 defects in the Horizon system? 22 A. That's my recollection, yes. 23 Q. Can we please look at POL00409718. I'm going to start 24 in October 2012, so within the first year of your 25 arrival at the Post Office, and this is an email from 8 1 Mandy Talbot to you, Hugh Flemington, who we're going to 2 hear from in a week's time -- he worked in Post Office 3 Legal, is that correct -- 4 A. That is correct, yes. 5 Q. -- and Jessica Madron, who was she? 6 A. She worked in the Legal Team, she was part of RM Legal 7 seconded to Post Office. 8 Q. Thank you. So is Mandy Talbot also a lawyer? 9 A. She was part of the RM Legal Civil Litigation Team. 10 Q. You, there, are the senior recipient of this email? 11 A. That's correct. 12 Q. She says, as follows: 13 "We need as an organisation to determine how best to 14 deal with all the case where allegations are being made 15 about Horizon and where there is money owed by the 16 former subpostmasters to the business. I am compiling 17 a list of the ones which have been sent down to me ... 18 "Regardless of the true facts, these postmasters 19 have all alleged that the true reason for the loss is 20 the malfunction of the Horizon system. There are 21 a number of issues which we need to resolve as 22 a business about these cases before the decision is 23 taken to send them out to BP." 24 "BP" being Bond Pearce; is that correct? 25 A. That's my recollection, yes. 9 1 Q. She then talks about the Seema Misra case and she says: 2 "As I understand the prosecution case the 3 defendant's expert has been unable to find any fault 4 with the system but has come up with a number of 5 opinions which have nothing to do with the case being 6 prosecuted. Assuming that the case is concluded within 7 the time period some of the issues set out will fall 8 away but if it is adjourned or if we lose it the 9 following points will become relevant. Misra is the 10 prosecution case involving Issy Hogg, one of the lawyers 11 used by Postmasters for Justice. If the prosecution is 12 fully successful it will make the civil claims much 13 easier to deal with. If the prosecution is only 14 partially successful then it is likely to make the civil 15 claims very difficult to proceed with if we cannot rely 16 on the Horizon data." 17 It says: 18 "Number 2 Postmasters for Justice plus Ms Hogg and 19 a lawyer from Shoosmiths are seeing the Minister at BIS 20 this week about Horizon issue -- we do not know what may 21 come of this but Mike [Granville] may be able to give us 22 a steer." 23 At the end of this, it says: 24 "Can I suggest that we have a conference call to 25 discuss how to deal with these cases going forward, 10 1 possibly on 20 October as by then I anticipate that 2 Misra will have concluded." 3 Can you assist us, this was October 2010, were you 4 aware of issues relating to the Horizon system and 5 litigation challenging the Horizon system earlier than 6 October 2010? 7 A. So this was part of a relatively late disclosure. I'm 8 trying to recollect when I became aware of it. I don't 9 think I was, no. I don't think I was. That's not my 10 recollection, certainly not from -- that's not what 11 I recollect. Obviously, seeing this now, then things 12 were being raised and I think what I was trying to do 13 was to look at this on a more -- on a rounded basis, so 14 I received this from Mandy, who was obviously 15 a litigation lawyer in the RMG Civil Litigation Team. 16 Q. As you said, you were the senior recipient of this 17 email? 18 A. Yes, in the Post Office, yes. 19 Q. Can we please look at POL00055590. We're still in 20 October, 21 October, and this is an email that this 21 Inquiry has seen quite a lot of. It's the email from 22 Jarnail Singh in relation to the Misra case and it's 23 where he says: 24 "It is ... hoped the case will set a marker to 25 dissuade other defendants from jumping on the Horizon 11 1 bashing bandwagon." 2 You were a recipient of that email, 21 October. 3 A. That's correct. 4 Q. In the email that we looked at earlier from Mandy 5 Talbot, she suggested a call to discuss matters going 6 forward after the Seema Misra case had concluded. Do 7 you recall a conversation, a meeting, once that had 8 concluded? 9 A. I'm afraid I don't recall one, no. 10 Q. Do you recall receiving this email? 11 A. Is that the one on the screen? 12 Q. Yes. 13 A. Yes. Well, it was in the first batch of documents 14 provided to me. 15 Q. I don't mean recall from the Inquiry providing it to 16 you, but do you recall, in your first year at the Post 17 Office, receiving an email from a senior lawyer in the 18 Criminal Law Division referring to the "Horizon bashing 19 bandwagon"? 20 A. No, I'm afraid I don't. 21 Q. Is it likely that that was sent to you in your capacity 22 as Head of Legal of the Post Office? 23 A. It is, yes. 24 Q. We're going to now move to April 2011. Can we please 25 look at POL00107844. This is an email chain relating to 12 1 the case of Mrs O'Dell and, if we could start at the 2 bottom of the page, please, bottom of the first page, we 3 have an email from Rebekah Mantle, Head of Dispute 4 Resolution at the Royal Mail Group, and it's sent to 5 a very limited distribution list: it's sent to Alison 6 Bolsover, who was at that time the Senior Debt Recovery 7 Manager at the Post Office; is that correct? 8 A. Yes, I think she gave evidence last year. 9 Q. Yes. We also have there Rod Ismay, the Head of Product 10 and Branch Accounting -- yes -- 11 A. Yes. 12 Q. -- and you. Why do you think this email was sent to the 13 three of you about the case of Mrs O'Dell? 14 A. This is my recollection. I think, at the time, I was 15 trying to understand this process that went through with 16 regard to subpostmasters and the civil litigation 17 process, and to try to bring some element of 18 proportionality to it, as a commercial lawyer, to say 19 "Should we be taking this action, given the likelihood 20 of us being able to recover and the costs"? 21 Q. We may see these three names in other emails. Was there 22 a particular reason why it was you, Alison Bolsover and 23 Rod Ismay? 24 A. No, unless she thought we were the decision makers but 25 I would have said Alison Bolsover was the decision maker 13 1 in this case but I was the Head of Legal for POL. 2 Q. Who was the most senior recipient of this email? 3 A. I was the most senior recipient. 4 Q. She says, as follows. She says: 5 "... I am wondering whether the below case is one 6 that is worth pursuing. Mrs O'Dell is claiming £290 7 from us; it would cost a lot more than this to defend so 8 I think we should settle this on the basis that it's not 9 economic to defend such a claim. We could raise as 10 a counter claim the loss of £9,616 (which we claim 11 Mrs O'Dell owes us as a result of branch discrepancies, 12 which she claims are as a result of issues with 13 Horizon). However, the legal costs of collating and 14 preparing evidence to show that [Post Office Limited] 15 suffered a loss and that it was not due to Horizon, 16 would exceed the value of the counterclaim." 17 If we scroll up, please, there's a further email 18 from Rebekah Mantle again to you, Alison Bolsover and 19 Rod Ismay, and she says: 20 "Just to keep everyone updated, Alison and I have 21 agreed not to defend O'Dell's claim on the basis it 22 would not be economic (even if we were to exceed 23 [I think that must mean 'succeed'], in defending the 24 claim the irrevocable legal costs would exceed the £290 25 she is claiming." 14 1 So, again, this is another email, we're now in 2011, 2 that relates to a subpostmaster raising an issue 3 relating to Horizon in her defence; do you agree with 4 that? 5 A. I do agree with that. 6 Q. It's your evidence, is it, that you were involved 7 because you wanted to bring a degree of proportionality 8 to these matters? 9 A. That's my recollection, yes, and I think, in Alison 10 Bolsover's evidence, she mentions that I'd gone up to 11 Chesterfield and we had a conversation about the Horizon 12 cases. 13 Q. Yes. Perhaps we can look at POL00184214, the next 14 month, May 2011. This an email from a lawyer at the 15 Royal Mail Group, Helen Watson, and she says: 16 "Thank you. I am copying in Chris Darvill of Bond 17 Pearce, as the case is now with him [I think this is 18 about a different case, I think it is called Drake], 19 although on hold pending confirmation from Susan 20 Crichton as to strategy on these Horizon cases 21 generally." 22 So it certainly seems as though Helen Watson had 23 understood your role at that point to be advising on 24 strategy of the Horizon cases. 25 A. Yes, and I think this goes back to my comment around 15 1 proportionality, to try to understand what was going on 2 with these cases and why we were bringing them, and what 3 had happened. So it wasn't necessarily driven by 4 I believed that Horizon wasn't working; I just wanted to 5 understand the process and the authorisation process for 6 bringing those claims. 7 Q. You had a group of Horizon cases that you were aware of. 8 Did you, at this point, consider whether the Horizon 9 system itself should be investigated? 10 A. I think as part of this work, it was an iterative 11 process of going back to the IT Department to say, "Have 12 you reviewed all network departments to say have you 13 reviewed all these cases? Can you explain to me how 14 these shortfalls arose and convince me? Because this is 15 the way they operated, that this Horizon was not at 16 fault". 17 Q. That's a conversation you had in 2011, is it? 18 A. I think I mention in another place in my statement that, 19 when complaints came in both from MPs or subpostmasters, 20 these were dealt with by IT, Network, looking at the 21 cases, trying to recreate the fact pattern -- this is 22 how I understood it -- and explaining to the ET or me 23 how this was not an issue with Horizon but was a more 24 general issue with the subpostmasters, more mistakes had 25 been made. That's what I remember happening. 16 1 Q. You had joined the Post Office in January 2010. We've 2 seen that, by October 2010 and well into 2011, you were 3 aware of subpostmasters raising issues with Horizon, 4 a growing number, and you have undertaken to review 5 a strategy on the Horizon cases. Do you remember any 6 specific meetings that you had with the IT Department 7 relating to Horizon cases in which you were reassured 8 that there weren't problems with Horizon? 9 A. I think they would have been related to the specific 10 cases, so I think what I would have done -- I can't 11 recollect one, but my normal practice would have been to 12 talk to both the IT and the Network Team to understand 13 why they were confident that these issues had not been 14 caused by Horizon. 15 Q. You said you addressed them as individual cases but you 16 are undertaking some sort of strategy review. Did you 17 not look at them strategically -- 18 A. Yes, that's right and, again, it was my background, 19 rather than -- I'm not a litigation lawyer but I was 20 trying to understand that part of the Post Office 21 process, and I relied upon the information given to me 22 by the IT and the Network Team to demonstrate to me that 23 these cases were not as a result of issues with Horizon, 24 but were because of other issues. 25 Q. How did they demonstrate that to you? 17 1 A. So they would take a case, I'm trying to think of one -- 2 so an issue would have come in from a subpostmaster, 3 either direct from the subpostmaster or from an MP, and 4 they would work through the case, and probably with 5 these litigation cases as well, and demonstrate the 6 entries that had been made, and I would -- and give me 7 assurance that it wasn't caused by Horizon. I am not 8 an IT expert, and would have relied on their assurance 9 about how had caused this loss or deficiency within the 10 system. 11 Q. You said "they" would give you a guarantee? 12 A. No, I didn't say they would give me a guarantee; I said 13 they would give me an explanation and, in my 14 recollection, it was a combination between senior people 15 in the Network and people in the IT Team would look 16 together at these and, often, it would be Network led. 17 Q. Can you assist us with some names, please? 18 A. So Angela van den Bogerd would certainly have been one. 19 It may have been led by Kevin Gilliland, as he was 20 responsible for the Network, although Paula was -- Paula 21 Vennells was the overall director. I'm just trying to 22 think from the -- and, generally, I would say Mike Young 23 led on that for the IT side, although he wouldn't 24 necessarily do the work himself but he would be the 25 leader of that. 18 1 Q. Thank you. We've seen both criminal and civil cases: 2 the Seema Misra case as an example of a criminal case, 3 the O'Dell case as an example of a civil case. 4 A. Correct. 5 Q. You then became Legal and Compliance Director and, from 6 1 April 2012, you became responsible for those matters 7 that had previously been managed by the Royal Mail 8 Group, including criminal prosecution? 9 A. That's correct. 10 Q. Can we please look at POL00180229, please. So we're now 11 on 7 June 2012, so post-separation, and this is an email 12 from Jarnail Singh. If we could have a look at that 13 bottom email, it's an email from you to Jarnail Singh 14 about a case called Yetminster, and you say: 15 "... if we decide not to go ahead with criminal 16 prosecution are there any risks for [the Post Office]?" 17 Am I right to understand that there was 18 consideration being given at this time to dropping the 19 case? 20 A. Yes, I think so. In fact, Yetminster is the name of the 21 branch -- 22 Q. Yes. 23 A. -- and because, at that time, we were having discussions 24 with Alice Perkins and Paula Vennells concerning 25 an independent review of Horizon, which, if my memory is 19 1 correct, we started having probably around about 2 February/March of that -- that was the first -- start of 3 that, around February/March of that year -- I was 4 concerned that we would be going ahead with criminal 5 prosecutions with the background that we had an 6 independent review of Horizon starting to happen. 7 Q. Why were you asking Jarnail Singh about the risks for 8 the Post Office? 9 A. Because I wanted to understand his view. It was also my 10 view, and I've said this in my statement, that I had 11 asked for any prosecutions that relied solely on Horizon 12 evidence to be ceased. Unfortunately, I cannot remember 13 when that view was -- when I formed that view but I know 14 it was part of the work we were doing in relation to the 15 getting an independent review on track. It wasn't 16 because I knew there was anything wrong with Horizon 17 necessarily but I just felt it was important that we 18 paused these cases whilst we did the review. 19 Q. Can we, please, look -- perhaps if we can keep that one 20 on screen and scroll up to the top of the email and we 21 can also bring onto screen, on the right-hand side, 22 POL00137248. It seems as though in May of that year 23 there had been a meeting with Lord Arbuthnot and Oliver 24 Letwin. I think you attended a preparation meeting. If 25 we please look at page 7 of this document, we can see 20 1 there at 6b, that's the Tracey Merritt case, I think 2 it's called "Merrick" on the left-hand side but it's 3 Merritt, and the Yetminster branch, and it said, "Led 4 by: Susan". So it looks as though, in May of that year, 5 you had personally reviewed some aspects of that case; 6 is that correct? 7 A. It looks like it but I'm afraid I can't remember. 8 Q. Are you aware that Ms Merritt had raised issues with 9 Horizon in relation to her case? 10 A. Yes, I mean, I must have been because that's the 11 evidence there. 12 Q. Thank you. If we stick with the right-hand side 13 document, please, the left one can come down. Jarnail 14 Singh says to you as follows. He says: 15 "As a prosecutor Post Office Prosecution Limited 16 must be seen to exercise its judgement in all cases 17 which give rise to potential criminal proceeding to 18 promote effective, consistent and fair decision making. 19 If not, a third party examination of our case by, say, 20 the Director of Public Prosecutions may result in 21 withdrawal of our ability to prosecute." 22 Is that a concern you were aware of, a withdrawal of 23 the ability to prosecute? 24 A. Was I -- I thought we should -- so, to take a step 25 backwards, our ability to prosecute was something I had 21 1 raised with Paula much earlier in the year and said that 2 we needed to review that. So I suppose, honestly, no, 3 I wasn't. I thought we should look at other ways of 4 managing these issues. 5 Q. He says: 6 "Decision not to prosecute cannot be kept secret 7 "everybody will find out what we are doing" this may 8 open post office to criticism and undermine faith in 9 Horizon. This U-turn will be exploited by potential 10 third party subpostmasters alliance. It may send 11 a green light for defendants to get hold of their Member 12 of Parliament and result in [I think he means 13 'capitulation' rather than 'copulation']. We need to 14 send a message that "post offices cannot be used as 15 a bank". We hold a robust stance, any wrongdoing will 16 be investigated, prosecuted and money recovered." 17 Were you in any way concerned by that response? 18 A. I think it's fair to say, particularly given the fact 19 that we were -- and I was trying to push for 20 an independent review, I didn't agree with that 21 response. 22 Q. Did you go back to Mr Singh and tell him those shouldn't 23 be part of our considerations? 24 A. I think I might have had a conversation. I don't think 25 there's a document showing I went back to him. 22 1 Q. Sorry? 2 A. I think I went back to him and said or explained that we 3 were going ahead to, you know, to set up an independent 4 review and as I felt there were other ways -- or we 5 should be considering our prosecution policy more 6 generally. But I really can't remember but that's what 7 I likely would have done. 8 Q. So you think and it's likely, but you can't actually 9 remember having done so? 10 A. Exactly. 11 Q. Was that view that was expressed there by Mr Singh 12 consistent with the views of the business more 13 generally? 14 A. In my view, yes, it was. 15 Q. Who in particular? 16 A. I think there was a -- I think there was a group of 17 people who had worked for the Post Office for a long 18 time who held this view, and I think in my statement 19 I mentioned it on a number of occasions, that this was 20 public money and that the Post Office should make 21 efforts to recover that money. 22 Q. You said a group: who was part of that group? 23 A. So my recollection would be it would be people who'd 24 worked in the Network, people who'd been in the business 25 for a reasonably long time. 23 1 Q. Who are those people? 2 A. I'm just trying to think. So Kevin Gilliland would have 3 been the Network Director, then there would be the Group 4 Debt Recovery Team in Chesterfield, and then there would 5 be obviously not -- so it would be sort of the 6 Network -- Angela van den Bogerd, Kevin Gilliland -- I'm 7 really searching for names now, I apologise, but that 8 was my -- it was the "This is public money and we need 9 to protect it", that was the sort of slogan, if you 10 will. 11 Q. We've seen from these emails this morning, early on in 12 your time at the Post Office and increasing, including 13 when you had responsibility for the Security Team, you 14 were aware of challenges to the Horizon system in the 15 context of criminal and civil proceedings and, by 16 May/June 2012 is it fair to say that you were thinking 17 about the impact of corporate decisions on criminal 18 cases? 19 A. Yes, I think that would be correct. 20 Q. Can we please look at your witness statement. You've 21 mentioned briefly about the continuation of prosecutions 22 whilst these concerns were happening. Can we please 23 look at WITN00220100. It's paragraph 255, which is 24 page 91. You say in the second half of that 25 paragraph 255: 24 1 "At some point around the time of the separation, 2 I recollect that I made it clear (including to the 3 Security Team) that no further prosecutions were to be 4 commenced which were reliant on Horizon evidence." 5 Now, it might seem that that wording there is quite 6 careful wording. Can you assist us with what it meant, 7 "reliant on Horizon evidence"; how was that defined? 8 A. So, in my mind, it was prosecutions that relied 9 specifically on the evidence produced by Horizon and the 10 corroboration evidence and, again, you know, forgive me 11 because I'm not a litigator, was insufficient to 12 outweigh that evidence. So I basically wanted the teams 13 to be very aware that they had a duty to review the 14 evidence and to decide whether there was sufficient 15 evidence to go ahead on that basis. 16 Q. Was there some defined criteria that were sent to the 17 Security Team and prosecutors in that respect? 18 A. You see, I haven't seen a document like that and I think 19 it would be a conversation that I had, certainly with 20 John Scott and certainly with Jarnail -- it might have 21 been via Hugh Flemington for Jarnail -- but I was trying 22 to heighten people's awareness about what we were doing. 23 Q. Did you articulate it similarly to the way you have 24 articulated it to this Inquiry, that it was cases that 25 involved Horizon evidence where there wasn't much more 25 1 than the Horizon evidence? I'm trying to understand the 2 test that was applied? 3 A. Certainly, yes, I think that would be one way of looking 4 at it but it was a bit more than that. It was for them 5 to really try and understand what had happened in the 6 branches and why the subpostmasters, if subpostmasters 7 were the issue, had got into this situation. 8 Q. Is it fair to say that that didn't stop prosecutions 9 taking place that involved complaints about the Horizon 10 system? 11 A. I think that's right, from the evidence I've now seen. 12 Q. If we look at POL00180774, we're still in June 2012, 13 20 June 2012, and this is about the Merritt case that we 14 were looking at before. If we look at the bottom email, 15 from Dave Pardoe to Jarnail Singh, and it's copied to 16 you above, he says: 17 "Jarnail, as this was a case where Horizon was being 18 cited as being at fault; I'm not sure if we want to 19 accompany the change in stance with a carefully worded 20 missive stating that our position is not an admission of 21 Horizon integrity issues (as it stands one of my 22 Security Managers has been asked to advise the 23 suspect -- presumably verbally)." 24 If we scroll up above, Jarnail Singh sends that to 25 you: 26 1 "Susan please see Dave Pardoe email below. Can 2 I have a word before response to Dave?" 3 Do you recall speaking to him about that? 4 A. I don't, no, but I would have spoken to him about that 5 and I would have made the point that we just discussed. 6 Q. So is it right that some cases were discontinued or 7 weren't proceeded with but the Post Office was very 8 clear that, when it was doing so, it shouldn't tell 9 people that it was because of the Horizon issue? 10 A. My position was that I didn't know, in the sense of 11 absolutely know, that there were issues with Horizon at 12 that stage but that I did know we were going to 13 undertake an independent review, and I didn't want to go 14 ahead with cases that depended solely or in 15 a significant way on the Horizon evidence. 16 Q. Why would it need to be carefully worded, though? 17 A. I think it just needs to be sensibly worded, really. 18 Q. The words he used are "carefully worded", and carefully 19 worded so as not to include an "admission of Horizon 20 integrity issues". You're copied into this email. Did 21 you say, "No, you should tell them that we've 22 discontinued because we're looking into Horizon 23 integrity issues"? 24 A. I can't remember what I said. 25 Q. Is it likely or unlikely that you had that kind of 27 1 a conversation? 2 A. I would say it is more likely than not but I really 3 can't remember, I'm afraid. 4 Q. So you think it's more likely than not that your 5 response to receiving this email would have been, "No, 6 we can mention Horizon integrity issues when we 7 discontinue the case"? 8 A. I really can't remember. 9 Q. Can we please look at POL00141400, the next month, 10 11 July. If we could scroll down to the bottom of 11 page 2, please. Do you recall advice from a lawyer at 12 Cartwright King called Harry Bowyer around this time, 13 relating to the case of Wylie? 14 A. So I can't -- didn't recall the advice but, obviously, 15 I've now seen it. 16 Q. Do you recall advice being given that certain steps 17 needed to be taken at this time, in light of what had 18 been discovered by Second Sight? 19 A. No, I don't think it was because of what had been 20 discovered; I think it was the start of the Second Sight 21 investigation, rather than what they'd discovered. So 22 I think it was the mere fact that the investigation was 23 going to go ahead. 24 Q. His advice was that certain steps needed to be taken by 25 the Post Office before a prosecution should take place? 28 1 A. That's certainly how I understood his -- reading it 2 recently, that's how I understood his advice. 3 Q. The bottom email from Jarnail Singh, which you're copied 4 into, says as follows: 5 "I agree. Defence will approach to stay the 6 prosecution until the review by Second Sight is 7 completed will become increasingly common. Post Office 8 view is that such an approach be resisted." 9 He says: 10 "There is no legal or forensic grounds to argue 11 defendants will not get a fair trial or abuse of 12 process. There is no reason to justify the case being 13 stayed. The fact that the review is being carry out is 14 not an acknowledgement that there is an issue with 15 Horizon, the system working properly and is being used 16 up and down the country. When the system has been 17 challenged in criminal courts has been successful 18 defended. There is no mileage in this position but is 19 in fact superficial." 20 Did you understand, at that point in time, that 21 Jarnail Singh was saying that there shouldn't be a stay 22 in cases simply because Second Sight were carrying out 23 their review? 24 A. That's what I understood him to say, yes. 25 Q. If we scroll up, please, to the top of page 2. Hugh 29 1 Flemington -- so he was a lawyer in your team? 2 A. Yes. 3 Q. Yes, he says: 4 "Do we have a counsel acting for [the Post Office] 5 saying [that] we should agree to stay requests?" 6 Jarnail Singh, copying you in, says: 7 "This was [Mr Bowyer's] advice which was forwarded 8 to you on 11 July." 9 He says, again, in the top email: 10 "Hugh/Susan are you happy with our stance or do you 11 want to make additions or amends." 12 If we scroll up, please, there is a response at the 13 bottom of page 1 from Mr Flemington, he says: 14 "J -- assume your recommendation hasn't changed and 15 is still to keep fighting any such application? Issues 16 appear to be: 17 "1. Comms brief needed to rebut the myths ... 18 "2. Clarity [regarding] Second Sight terms of 19 reference ... 20 "3. A plan/bible of what information we are going 21 to provide our legal teams and the courts if we have to 22 fight applications to stay. 23 "4. Plan to deal with disclosure requests ..." 24 It seems as though, in the summer of 2012, the Post 25 Office perhaps wasn't going to investigate or wasn't 30 1 going to proceed with new cases but, where there were 2 ongoing existing cases, it was full steam ahead. 3 A. I think in this case -- well, I think it eventually got 4 stayed. I can't remember. 5 Q. But, in terms of your instructions, as Head of Legal, 6 there is an email chain here that queries whether to 7 agree to stays and it seems as though the feedback to 8 Jarnail Singh is very much business as usual? 9 A. It certainly looks like that, yes. 10 Q. Yes. Would you be surprised if we didn't find an email 11 from yourself querying why they are continuing to 12 prosecute? 13 A. Yes. 14 Q. You'll be surprised if there wasn't an email query? 15 A. Well, it looks like we were having a conversation about 16 it -- 17 Q. Yes. 18 A. -- and I think that would have been part of the 19 conversation as to just how much reliance -- and, 20 obviously, it was the old Horizon system, not the new 21 Horizon Online system, how much reliance we were placing 22 on the Horizon evidence. 23 Q. Did you agree or disagree with the sentiments that are 24 being expressed in this email chain? 25 A. I can't remember. However, I do remember that we asked 31 1 the Comms to assist in a press release or something that 2 could be used with the agents who represent us, as to 3 how to characterise the Second Sight investigation. 4 Q. So the response to a criminal prosecution and the 5 potential of a stay was to draft a comms brief? 6 A. No, I'm just saying that that's what I remember 7 happening at that time? 8 Q. Yes, and do you remember expressing a view that the case 9 of Wylie at this time should not proceed? 10 A. I cannot remember. 11 Q. Looking at this chain that was copied to you, do you 12 think it's likely or unlikely that you gave such 13 an instruction? 14 A. I really can't remember. 15 Q. I'm going to move on to look at the Board's knowledge of 16 these kinds of issues. We're going to move back -- 17 SIR WYN WILLIAMS: Before you do, Mr Blake, the last email 18 on the screen is, as I read it at least, before 19 a meeting has taken place following those emails, if you 20 see what I mean. I'm reading "One for our 3.30 meeting, 21 I think", as being these points are to be discussed and 22 that would be consistent with the timing of the email. 23 Is there any note, so far as the Inquiry knows, of 24 a meeting which then followed? 25 MR BLAKE: Sir, I'm not aware of a note. We can certainly 32 1 look into it but perhaps a question for Ms Crichton is: 2 does she recall such a meeting taking place? 3 SIR WYN WILLIAMS: Absolutely, thank you. 4 A. I'm afraid I don't, no. 5 SIR WYN WILLIAMS: Do I take it that the email chain then 6 peters out, so to speak? 7 MR BLAKE: It does, yes. If we could scroll up to the top 8 of the page, please. 9 There's a message from Jarnail Singh to Hugh 10 Flemington saying that this case deals with the old 11 Horizon system. 12 I'm going to move on to knowledge of the Board 13 around this period. Could we have look at POL00095587. 14 We're moving back in time slightly to January 2012. 15 This is a significant litigation report. If we scroll 16 down, we see your name there at the bottom and January 17 2012. 18 Did you implement significant litigation reports to 19 the Board; was that your idea? 20 A. Yes, it was. 21 Q. Do you recall when you implemented that, approximately? 22 A. I had a conversation with Paula Vennells and said that 23 I felt that these should be included in the Board packs. 24 I think it might have been January 2012 because that was 25 pre-independence. I think it might have been, yes. 33 1 Q. So this may have been the very first significant 2 litigation report? 3 A. It might well be, yes. 4 Q. If we scroll up, please, 1.1, it says: 5 "Post Office Limited has received four letters 6 before action from a firm acting for former 7 subpostmasters who were dismissed when discrepancies 8 between their branch accounts and cash positions were 9 discovered." 10 Is that the Shoosmiths claim at that stage? 11 A. I think it was, yes. 12 Q. If we look down at 1.5, it says: 13 "We may receive a large number of similar claims -- 14 possibly between 55 and 150 according to press reports." 15 It says: 16 "Our strategy is to defend each claim robustly to 17 deter future claims and we will be responding to each in 18 full. At present we consider the legal claims to be 19 weak and the damages claims to be inflated. We do not 20 know what the ultimate value of these claims will be." 21 Where it says "our strategy", who was "us"? 22 A. I think in that context it was RMG Civil Litigation with 23 input, I'm guessing, from me. 24 Q. You drafted the Significant Litigation Report? 25 A. I think they may well have drafted it and I checked it 34 1 or read it, anyway. 2 Q. So "our strategy" is whose strategy? Anyone in 3 particular? 4 A. As I say, I think it was suggested by RM Litigation Team 5 and accepted by me as an initial strategy. As I've 6 said, previously, I was anxious to understand the Post 7 Office's view and to bring more elements of 8 commerciality to it. 9 Q. We can have a look at the Board meeting itself. Can we 10 please look at POL00021503. This is the Board minutes 11 of 12 January. We see there that you are attending to 12 deal with items number POLB12/06, is that "to 14", so 13 all items between 6 and 14? 14 A. I think so, yes. 15 Q. We see there Mr Young is also in attendance, he's only 16 there to deal with POLB12/13. By this time, I think you 17 were Legal and Compliance Director, part of the 18 transition period; is that correct? 19 A. Yes. 20 Q. Can we please turn to page 6 and there is discussion of 21 the Significant Litigation Report. It's your evidence 22 is that that report itself may have been drafted by the 23 Royal Mail lawyers. If we scroll down, please, it seems 24 as though -- did you present that report to the Board? 25 A. I'm not sure whether I presented it or not but, 35 1 obviously, Les Owen asked questions. 2 Q. I'll read as follows, it says: 3 "Les Owen ..." 4 Do you recall Les Owen; he was a Non-Executive 5 Director? 6 A. I do, yes. 7 Q. Do you recall him -- I think he was also a Non-Executive 8 Director at number of other companies, including one 9 that is technology based? 10 A. I didn't know that but I know he was on the RMG Board. 11 Q. He, ultimately, I think, became Chairman of Royal Mail 12 Group. 13 A. I didn't know that. 14 Q. He asked: 15 "... for assurance that there was no substance to 16 the claims brought by subpostmasters which had featured 17 in Private Eye." 18 So there was a report in Private Eye. It says: 19 "Susan Crichton explained that the subpostmasters 20 were challenging the integrity of the Horizon system. 21 However the system had been audited by RMG Internal 22 Audit with the reports reviewed by Deloittes. The audit 23 was very positive. 24 "The Business has also won every criminal 25 prosecution in which it has used evidence based on the 36 1 Horizon system's integrity. 2 "Susan Crichton suggested that she clear the audit 3 report with the external lawyers and if it is possible 4 to give the report privileged status it would be 5 circulated to the Board." 6 What did you understand at this stage "integrity" to 7 mean, in respect of the Horizon system: 8 "... it has used evidence based on the Horizon 9 system's integrity." 10 A. I would understand it to be reliability: reliability and 11 probity, I guess. 12 Q. Do you recall the Board probing the information that you 13 gave them on this occasion? 14 A. No, I don't. 15 Q. It does seem, at least from these Board minutes, that 16 you were, at that time, the channel passing information 17 to the Board relating to Horizon integrity? 18 A. I think what I was doing was responding to Les Owen's 19 question about the subpostmasters' article in Private 20 Eye, which is the one I referred to in my statement when 21 I say that, at the Executive Team meeting, I had asked 22 Mike Young because he -- the letter had come from him, 23 I think -- how he had assured himself that it was 24 appropriate to write in the terms to Private Eye and, in 25 documents that have been recently disclosed, there's 37 1 a draft from one of the RMG PR Team, I think. 2 Q. In terms of channels to the Board, though, I mean, he 3 was actually present and spoke to an entirely different 4 matter. It seems as though you were the channel to the 5 Board in relation to the challenges bought by 6 subpostmasters relating to the integrity of the Horizon 7 system? 8 A. Certainly in this case, yes. 9 Q. Can we please look at POL00103334. It's page 122 of 10 that document, please. It may take a minute to come up 11 because it's a large document. Thank you very much. 12 Page 122. This is a paper that was provided to the 13 Board by Mike Young for the 15 March Board meeting, so 14 a later board meeting, addressing the Horizon system. 15 I'm just going to read to you a little bit of 16 "Background". He says in this paper: 17 "The recent incident on Horizon was the fourth 18 significant service failure of this system in nine 19 months." 20 If we scroll down, please, he says: 21 "As part of the move to Horizon Online, the contract 22 was renegotiated and the architectural design changed in 23 order to reduce Post Office's operating costs by 24 £50 million [per year] (excluding VAT). One of the 25 design changes which contributed significantly (circa 38 1 £5.5 million [per year]) to the savings was moving to 2 an active/passive data centre arrangement. Consequently 3 the resilience is now housed in one data centre with the 4 second data centre primarily being used as a test 5 environment but available for disaster recovery if 6 required. 7 "As a consequence of moving to the active/passive 8 design, when hardware issues arise they will result in 9 network wide service disruption. 10 "The previous active/passive data centre arrangement 11 would have prevented an impact to customers for the 12 incidents of 12 December and 1 March as the hardware 13 would still have been working in the other data centre. 14 "The level of risk associated with this design is 15 being challenged in light of our future business 16 strategy." 17 If we scroll down, please, over the page, and over 18 to the final page we see there, that's from Mike Young 19 to the Board. Now, that, as we can see, is a very 20 technical report relating to Horizon. Was any link 21 drawn between those technical reports from the Chief 22 Operating Officer and your reports about the challenges 23 to the Horizon system by the Board around this time; 24 were those strings drawn together at all? 25 A. I don't recollect that they were. 39 1 Q. Mr Young, as we know, left in 2012 and some of his 2 responsibilities then fell to you? 3 A. The Security Team fell to me. 4 Q. Yes. By the spring of 2012, were you personally 5 beginning to draw the strings together relating to 6 problems with Horizon and challenges to Horizon? 7 A. I was certainly -- when we started to talk about 8 an independent review, I was certainly very much in 9 favour of that. 10 Q. Can we please look at POL00179524. So you said you were 11 in favour of an independent review to look into those 12 issues. We're now in March 2012 and Alwen Lyons, the 13 Company Secretary, sends you, Lesley Sewell, who at that 14 time, I think, was the interim Chief Operating Officer, 15 Kevin Gilliland, who was the Network and Sales Director, 16 a report called "Horizon Integrity", and we're going to 17 see that as what we know as the Ismay report. 18 A. That's correct. 19 Q. Can you assist us with why Alwen Lyons in 2012 sent you 20 a report that dated back to 2010? 21 A. My recollection is that I hadn't -- I had not seen the 22 report before and, as we were starting to think about or 23 to look at commissioning an independent review, I think 24 Alwen must have remembered that it existed and got it 25 from Rod Ismay. 40 1 Q. Thank you. So you, as we've heard, were Head of Legal 2 in 2010 but that was not a document shared with you at 3 that time? 4 A. I have no recollection of it being shared with me at the 5 time. 6 Q. These recipients -- you, Lesley Sewell and Kevin 7 Gilliland -- were you the three, or perhaps together 8 with Alwen Lyons, looking into the issue of a possible 9 review of the Horizon system? 10 A. I think it was more Lesley was leading on the 11 development of a terms of reference for the review and 12 possibly Kevin Gilliland hadn't seen it before either. 13 Q. Let's look at the Ismay report. It's POL00179521. It 14 goes to Dave Smith, who was then the Managing Director, 15 from Rod Ismay, Head of Product and Branch Accounting; 16 you have the Finance Director there; and we have Mike 17 Young, the Chief Technical and Services Officer; rob 18 Wilson, Head of Criminal Law; Mandy Talbot is also 19 a recipient. Does it strike you as odd that the Head of 20 Criminal Law, Mandy Talbot, "Principal Lawyer (Civil)", 21 were recipients alongside the Managing Director but you 22 weren't a named recipient of that report? 23 A. I can't comment on that but I didn't recall seeing it in 24 2010, certainly. 25 Q. Does that distribution list strike you in any way as 41 1 odd, that you're not named there? 2 A. I suppose it was focusing on those people in the RMG 3 team who dealt with Horizon issues and possibly they had 4 contributed to the report. 5 Q. The report, I'm just going to read a few extracts from 6 it: 7 "Post Office Limited has, over the years [and this 8 is only in 2010], had to dismiss and prosecute a number 9 of subpostmasters and Crown staff following financial 10 losses in branches. A small number of these have made 11 counterclaims that they were not guilty of the charges 12 made but that the Horizon system was faulty." 13 There's a section, if we scroll down, there's 14 an "Executive Summary" there. If we turn to page 15, 15 there's a section on "Known IT Issues", including things 16 like screen freezes. 17 Page 17, please. There is a section on "Court 18 Decisions". I'll just read a few passages from this 19 section. It says: 20 "There have been cases, when taken to court by [the 21 Post Office] where the defence has claimed that the 22 accounting system Horizon was at fault and that there 23 were incidents such as 'ghost transactions' or 24 'electrical supply issues' which have corrupted the 25 Horizon records. 42 1 "With 2 notable exceptions, [the Post Office] has 2 been able to rebut these assertions by ensuring a focus 3 on the facts of the Horizon transaction logs and 4 a request for the defence to be specific about which 5 transactions they consider us to be 'ghost' and why." 6 Are you able to assist us with the two notable 7 exceptions, what they may have been? 8 A. Was the Cleveleys case one of those? No, I'm not, 9 actually. I'm ... 10 Q. You're wondering whether it was the Cleveleys case? 11 A. The Cleveleys case. 12 Q. That case is actually mentioned further down and we'll 13 come to that. 14 A. Right, okay. 15 Q. You're not able to assist with two notable exceptions? 16 A. No. 17 Q. Do you recall asking what the two notable exceptions 18 were? 19 A. No, I don't. 20 Q. If we scroll down, please: 21 "There are three 'landmark' cases which feature in 22 the arena of challenges to Horizon." 23 The first, we see there, the Cleveleys: 24 "... subpostmistress dismissed in 2001 soon after 25 Horizon was introduced. The defence produced a report 43 1 which showed how Horizon 'could' have caused an error 2 and [the Post Office] did not have the audit transaction 3 logs to refute the claim. [The Post Office] settled out 4 of court [it says there] for £187,000, but subsequently 5 improved the retention of audit transaction logs. This 6 case would not have the same outcome today because of 7 improved liaison between Fujitsu and [the Post Office] 8 and availability of logs." 9 It then goes on to the Castleton case: 10 "... Lee Castleton claimed that Horizon was faulty 11 and found other subpostmasters to back him. However 12 [the Post Office] presented the audit transaction log to 13 his solicitor who promptly advised Castleton there was 14 no basis to his case. Castleton sacked him, lost the 15 case, and was found liable for £300,000 and went 16 bankrupt. The judge decided that there was 'no flaw' in 17 the Horizon system and said 'the logic of the system is 18 correct ... and the conclusion is inescapable that the 19 Horizon system was working properly in all material 20 aspects'." 21 If we scroll down, there's the case of Mr Darlington 22 at Alderley Edge as well. 23 Did this cause you any concern when you read it that 24 there's mention there of the history of cases relating 25 to challenges to Horizon? In this case, we have civil 44 1 cases, so not outside of your area of expertise. Were 2 you concerned on reading that? 3 A. I think it fed into my view of the need to do 4 an independent investigation. I can't remember 5 specifically reading this in 2012 but I think it just 6 sort of further confirmed that we needed to try to 7 resolve the issue or understand what the issue was, 8 perhaps I should say. 9 Q. We've seen this morning the continuation of prosecutions 10 relating to Horizon. Doesn't it need a little bit more 11 than just to think about an internal or an independent 12 review of some sort? 13 A. I think at that time that that was my understanding, 14 that some independent review would assist the business 15 in deciding or understanding what was going on in this 16 situation. 17 Q. Thinking about it now, though, do you think that there 18 was a lack of urgency? 19 A. Absolutely, with hindsight, I feel -- and, you know, 20 I started off by saying how sorry I was; I'm also sorry 21 that this took such a long time to be resolved on my 22 watch. 23 Q. If we please go over to page 19, there's reference there 24 to "Independent Review and Audit Angles", and it's ruled 25 out in 2010. It says: 45 1 "[The Post Office] has actively considered the 2 merits of an independent review." 3 It says further down: 4 "Ernst & Young and Deloittes are both aware of the 5 issue from the media and we have discussed the pros and 6 cons of reports with them. Both would propose 7 significant caveats and would have limits on their 8 ability to stand in court, therefore we have not pursued 9 this further." 10 If we scroll down, please: 11 "It is also important to be crystal clear about any 12 review if one were commissioned -- any investigation 13 would need to be disclosed in court. Although we would 14 be doing the review to comfort others, any perception 15 that [the Post Office] doubts its own systems would mean 16 that all criminal prosecutions would have to be stayed. 17 It would also beg a question for the Court of Appeal 18 over past prosecutions and imprisonments." 19 We have looked this morning at the question of stays 20 and the decision taken to press on with existing cases. 21 Did receiving this in 2012 cause you to rethink whether 22 that was the appropriate course of action? 23 A. It certainly should have done, yes. 24 Q. On receiving this in 2012, did you speak to anybody 25 within the business about it? 46 1 A. I can't remember. 2 MR BLAKE: I'm going to move on now to the selection of 3 Second Sight. 4 Sir, that might be an appropriate moment to take our 5 first break of the day. I think the proposal is for it 6 to be a ten-minute break. 7 SIR WYN WILLIAMS: Yes, that's right. So -- 8 MR BLAKE: So 11.05. 9 SIR WYN WILLIAMS: 11.05. Thank you very much, Mr Blake. 10 MR BLAKE: Thank you very much. 11 (10.54 am) 12 (A short break) 13 (11.05 am) 14 MR BLAKE: Thank you, Mrs Crichton. 15 We're going to move on now to the selection of 16 Second Sight as the independent reviewer. Can we, 17 please, look at POL00002000, please. At paragraph 107 18 and also 134 of your statement, you say that Deloitte 19 prepared a proposal for an independent review around May 20 2012 and I think this is the proposal document. 21 A. Yes, I was pleased it was disclosed because I thought 22 I remembered it, but I hadn't received a copy of it. 23 Q. If we look at page 4, please. Deloitte, in what they 24 call Project Spire, set out a proposed approach to 25 a review, and they said: 47 1 "Step 1: understand processes, data flows and key 2 risks. 3 "Fundamental to the assessment of processing 4 integrity is the understanding of data flows, processes 5 and key risks in the end-to-end process." 6 A bit further down, they say: 7 "Using our Data Governance framework as a best 8 practice benchmarking tool, we perform a current state 9 analysis on the organisation, interviewing key 10 personnel, examining documentation and reviewing 11 systems." 12 At step 3: "Sample to confirm data accuracy and 13 integrity", they refer to their data testing using 14 a substantive testing technique. Did you understand 15 Deloitte to be proposing quite a technical look at the 16 Horizon system? 17 A. To the extent that I remember it, I remember thinking 18 that this wasn't looking at it from the point of view of 19 people operating the system but, rather, the system as 20 a whole. 21 Q. Yes. Perhaps if we go back to POL00137248, please, the 22 preparation meeting for the Lord Arbuthnot and Oliver 23 Letwin meeting. That was also May of that year. Can we 24 please look at page 3, there's a reference to Deloitte 25 and it says as follows: 48 1 "Why are we considering Deloittes to perform the 2 audit?" 3 It says: 4 "KPMG are excluded as they are Fujitsu's auditor. 5 "Ernst & Young are included as they are Post 6 Office's auditor", et cetera. 7 Then it says: 8 "Deloittes are on Post Office's supplier shortlist 9 and have proven experience in this area." 10 Then it says -- these are potential questions that 11 could be asked: 12 "The audit could cost in the region of £250,000 to 13 £500,000, why so expensive?" 14 The answer is: 15 "The audit envisioned is thorough end-to-end review 16 of processes, systems and data which not only could 17 reveal potential improvements but could be used as 18 an assurance for [future court cases]. The cost is as 19 a result and thoroughness of the audit and the expertise 20 required. An alternative, reduced scope audit could 21 also be considered." 22 So was that your understanding, as at May 2012, that 23 there was going to be potentially a thorough end-to-end 24 review carried out by Deloitte? 25 A. My understanding was that that was what was suggested. 49 1 Q. By Deloittes or by -- 2 A. By Lesley and Deloittes. So she had led on the 3 commissioning and conversations with Deloitte, although 4 I have a vague recollection of going to a meeting with 5 Deloitte to help scope the project but, really, Lesley 6 was leading on that, Lesley Sewell. 7 Q. Yes, thank you. Can we please look at POL00006484. 8 We're now in June 2012 and there is a meeting with 9 Richard Morgan QC, 12 June, at his chambers. You are 10 one of the people attending. Can you recall the purpose 11 of this meeting? 12 A. So I think this was after Alice Perkins had asked me to 13 find a forensic accountant of a different type or maybe 14 it was just in respect of the independent review, but 15 I think I'd asked for help in drafting the terms of 16 reference, from Bond Pearce. 17 Q. The note says, as follows: 18 "It was recognised that an impasse had been reached 19 in relation to the Horizon litigation which POL is 20 seeking to address." 21 Just pausing there, was that, at that stage, 22 Shoosmiths or was that something else? 23 A. Sorry? 24 Q. What was the Horizon litigation at that stage? 25 A. Oh, that was the Shoosmiths -- that was the Shoosmiths 50 1 litigation, yes. 2 Q. "The question is what is the best way of breaking that 3 impasse. 4 "The proposal to instruct an independent expert to 5 prepare a report on the Horizon system is the highest 6 risk response to the issue. What will it achieve? It 7 will not be able to address any of the civil/criminal 8 cases dealt with understand 'Old Horizon'. Will it seek 9 to review particular cases? If so, which ones?" 10 Are you able to assist us with who that is a note 11 of? Is that of counsel or is that an attendee? 12 A. I think it must be an attendee. 13 Q. "Whatever the findings of the expert report it will not 14 resolve the problem. [The Post Office] will be 'damned 15 if they do and damned if they don't'." 16 Do you recall that being said by somebody? 17 A. I don't but it's presumably an accurate recording of 18 what was said at the meeting. 19 Q. Again, are you able to us with whether that is -- if we 20 have a look at the top of the page it says, "Summary of 21 Conference"? 22 A. I think that might have been counsel. 23 Q. Thank you. If we scroll down, please, it then says: 24 "[The Post Office] will always have this problem -- 25 some people will never trust computers and will always 51 1 believe they have an inherent problem. 2 "A less risky approach is to agree to take relevant 3 MPs privately through particular cases in which they are 4 interested." 5 Can you recall the discussion in that conference? 6 Was this the general view of the attendees, was this 7 just the advice of counsel? 8 A. It was certainly the advice of counsel, I do recall 9 that. I also recall the -- what he -- what is described 10 in the note as "a less risky approach" was the current 11 approach that was taken by Post Office. As I've 12 explained earlier in my evidence, they would take the 13 cases where there were complaints and work those 14 through. 15 Q. Did you agree with the advice that was being given or 16 the information that's recorded here? 17 A. I felt, given my conversations with Alice Perkins, that 18 we had to move on from this position, which was why -- 19 and I think it was by this stage she had asked me to 20 find a forensic accountant who might be able to help in 21 a different way to that described in the Deloitte 22 report, Deloitte proposal. 23 Q. Can you just assist us: you referred to conversations 24 with Alice Perkins. Can you just summarise that for us? 25 A. My memory is that we'd had a meeting where the Deloitte 52 1 proposal was explained and I think it was either that 2 meeting or shortly thereafter she had asked me -- and 3 I include it in my witness statement -- if I knew of 4 a forensic accountant who might be able to help, and she 5 had a sort of -- as I described, a shopping list: so 6 shouldn't be one of the big four; had to be somebody who 7 would be able to carry out the review; would be somebody 8 who would be credible to the MPs, James Arbuthnot, 9 Justice for Subpostmasters; and would be able to have to 10 conversation with subpostmasters. 11 Q. Why not one of the big four? 12 A. I'm not entirely clear on that but I think it was 13 because what the Chair didn't want was something along 14 the Deloitte spec, which was very much process. My 15 retrospective interpretation of that is that she did 16 want to take into account the subpostmasters experience 17 in dealing with the system and also to focus on the MPs' 18 cases and, obviously, the Deloitte report might have 19 gone some way to that but it wouldn't have focused on 20 the MPs' cases. 21 Q. Did the advice from counsel at this meeting influence 22 the decision as to whether Deloitte was or was not 23 chosen? 24 A. No, I don't think so. 25 Q. You've said in your witness statement, paragraph 152, 53 1 that: 2 "From my perspective, the investigation was 3 undertaken precisely to assess whether there were issues 4 with the Horizon system." 5 You say, "From my perspective". Were there 6 different perspectives on that at this time? 7 A. I'm not sure there were at this time but, from my 8 perspective, at the time it was kicked off/started, it 9 was to take the cases put forward by the MPs and for 10 Second Sight to work those cases through, using their 11 specialist expertise, as I think I've described in the 12 statement in various ways. 13 Q. We're going to now look at a proposal from Second Sight 14 in June 2012. Can we please look at POL00096576. This 15 is a report or a proposal that has been produced by 16 Second Sight to: 17 "... carry out an Independent Review of past fraud 18 and theft cases in order to determine whether the facts 19 support the business's findings and the charges brought 20 against individuals." 21 Can we just scroll down the page, over to the next 22 page. So the proposal: 23 "Second Sight has been invite to carry out a review 24 of a yet to be determined number of closed, and possibly 25 some still open, fraud and theft cases." 54 1 So, as you've said, the proposal there is to look 2 specifically at the cases rather than the system as 3 a whole, potentially? 4 A. Correct. 5 Q. If we scroll down, we can see that this proposal has 6 been drafted by Mr Warmington, that's on page 3, 1 June 7 2012. Could we please turn to page 5. It does seem 8 that at least to some extent, under the heading of "Case 9 Review -- Approach", there will be -- if we look at the 10 right-hand side, fourth paragraph, fourth bullet point 11 down: 12 "Study and selectively test the 'Horizon' system in 13 order to find any 'Black Hole' Program Bug; etc that 14 might have caused mysterious shortages." 15 So it did seem that part of Second Sight's proposal 16 was going to be to test the Horizon system? 17 A. But I think it was to test it in the context of those 18 cases, not more generally. That was my understanding. 19 Q. Thank you. Can we please look at POL00180209 and, if we 20 scroll down to the very bottom, the second page, the 21 bottom of an email chain. At the very bottom of page 2, 22 we have Ron Warmington sending you and Simon Baker the 23 proposal. He says: 24 "As promised, here is our Proposal for the Case 25 Review." 55 1 If we scroll up, we have Simon Baker responding to 2 you and also addressing it to Lesley Sewell as well. He 3 says: 4 "Attached is Ron's proposal. 5 "My view is that we make it clear to Alice/Paula the 6 distinction between the work Ron is proposing 7 (an independent review to past cases) and the Horizon 8 Forensic Audit (the Deloittes proposal) and put it on 9 the agenda to discuss tomorrow." 10 Now, it seems as though the suggestion is that there 11 are potentially going to be two different 12 investigations: one is the Second Sight independent 13 review of past cases and the other is a forensic audit 14 carried out by somebody like Deloittes; is that 15 understanding correct? 16 A. I can't remember. I just know that they were quite 17 different reviews and I think we made that clear as part 18 of the meeting with Alice Perkins and Paula Vennells. 19 Q. If we scroll up, please, we have an email from you, 20 saying: 21 "In the meantime Alice has asked for a [Terms of 22 Reference] for the work that Ron et al are going to do 23 ..." 24 If we control up, Simon Baker responds, saying at 25 the bottom: 56 1 "I am also hoping to have a proposal from Deloittes 2 some time this evening which I will also bring to the 3 meeting tomorrow." 4 So it looks as though there is going to be a meeting 5 on 7 June, relating to the various proposals. 6 Can we please turn to POL00233736. This is 7 a timeline of the Mediation Scheme and it's only one 8 part on page 3 that I'd like to take you to. It logs 9 various events over various dates and, if we could look 10 at 7 June 2012, it says in this document: 11 "A meeting is held between Paula Vennells, Alice 12 Perkins, Susan Crichton, Alwen Lyons and Simon Baker 13 where the Deloitte and Second Sight proposals are 14 discussed. 15 "Second Sight is chosen as the preferred supplier." 16 So it seems, by 7 June, it was an either/or decision 17 between Deloitte and Second Sight, not a proposal to 18 have both types of review, and Second Sight win the 19 contract; is that correct? 20 A. I can't recollect that we were going to do both of them 21 but I do recollect that Alice Perkins' objective was to 22 satisfy the MPs, in regard to their constituents, so 23 obviously the Second Sight review would be more likely 24 to do that than the Deloitte review would be. 25 Q. Can you recall that meeting? What was discussed at that 57 1 meeting? 2 A. I can't, no. All I can recall is the information I've 3 seen in the emails. 4 Q. You refer in particular to Alice Perkins. Was she 5 a particular driving force at this meeting? 6 A. Yes, she was. Well, I think -- at the meeting, I can't 7 remember but I know that she was very much engaged with 8 the matter of trying to resolve the MPs' queries. 9 Q. So the focus for her was resolving the issues for the 10 Members of Parliament and their constituents? 11 A. That's my recollection, yes. 12 Q. Do you recall the view of Paula Vennells at this time? 13 A. No, I don't think I do but I suspect it would have 14 probably been the same. 15 Q. What was your view at this time? 16 A. I just -- I felt very, very strongly we needed to move 17 forward and, you know, if that was getting Second Sight 18 to do a review of the MPs' cases, I felt that would help 19 us understand what was going on. 20 Q. But it wouldn't, of course, carry out some sort of 21 end-to-end technical review of the type that was 22 proposed by Deloitte? 23 A. No, it wouldn't. 24 Q. So when you say "move things forward", do you mean bring 25 to a swift conclusion the issue? 58 1 A. I think I was trying -- it's difficult to remember, it's 2 so long ago, but I was trying to ensure that the cases 3 raised by the MPs were properly reviewed, and the 4 Deloitte's proposal would not do that. 5 Q. Well, they would help you to understand the underlying 6 problems, though, wouldn't it? 7 A. It was a very technical audit and, you know, the 8 proposal was pretty technical. I wasn't actually sure 9 because I think what we were looking at, in terms of 10 what terms subpostmasters were dealing with, was the 11 system possibly not performing as it ought to and 12 I wasn't sure that the Deloitte's report, in hindsight, 13 would have given us that insight. 14 Q. It's a very technical system, though, isn't it? 15 A. It is. 16 Q. Didn't a technical system need a technical report? 17 A. So I'm struggling a bit because I'm trying to find the 18 right word. What I wanted to do was to look at it from 19 the subpostmasters' point of view because, yes, it's 20 a technical system but as -- having worked in Financial 21 Services for a long time, my background was technical 22 systems have to be made to work for the people who use 23 them, so it's how does this then work to support the 24 subpostmasters in their offices? 25 Q. In terms of Second Sight, Ms Vennells said in her 59 1 witness statement that you knew Ron Warmington from 2 earlier in your career and socially at a local tennis 3 club, she says, although she understood that you weren't 4 a close acquaintance. Are you able to assist us with 5 that? 6 A. So I'd worked with Ron Warmington at GE and I certainly 7 didn't know him outside work. 8 Q. So the suggestion that you knew him socially at the 9 tennis club, that's wrong? 10 A. No. 11 Q. How well did you know Mr Warmington? 12 A. He worked -- so I was part of the EMEA team at GE 13 Consumer Finance. He was actually part of the 14 International Team, I think, Fraud and Investigations. 15 So he and I had worked closely on a couple of 16 investigations that he'd done with me, one in 17 Switzerland and one, from memory, in Czech, and I think 18 he also provided advice on fraud prevention but that 19 would more probably have been for the risk team at 20 General Electric, rather than for me. 21 Q. We saw there in the proposal -- there was at least 22 a proposal to look at some technical aspects insofar as 23 they related to the individual cases. 24 A. Yeah. 25 Q. Was that discussed at all, once Second Sight had been 60 1 taken on, as to how their technical investigation would 2 take place? 3 A. Certainly when they came into the office, yes, I think 4 it was because, when they came into the office, I gave 5 them or showed them the files that we had managed to 6 obtain and I then arranged for them to have a briefing 7 on Horizon, again, from memory, they did Horizon 8 training. Simon Baker, who was the project lead, was 9 part of Lesley Sewell's IT and Change Team so he 10 provided the link into the IT system and it was Ian 11 Henderson's particular area of expertise. So 12 I certainly thought that's what -- part of what they 13 would do. 14 Q. One of the first areas of discussion is whether those 15 who had been convicted should be included in Second 16 Sight's review, and I think you said that, at that 17 stage, there was a concern about reopening prosecutions 18 that had concluded; is that right? 19 A. That is correct, yes. 20 Q. Can we please look at POL00180234. It's an email from 21 Simon Baker to yourself of 7 June 2012. He says: 22 "In speaking with Mike this afternoon we wondered if 23 it is worth making a distinction in the [Terms of 24 Reference] between cases that have been prosecuted and 25 those that haven't. 61 1 "For those cases that have already been through the 2 legal system we don't want to be seen as reopening the 3 cases, instead we want to position those as a review of 4 the existing evidence to enable an understanding of the 5 allegations and facts in regards to Horizon. 6 "For those that haven't been prosecuted we can 7 position as a full independent investigation." 8 So was part of your thinking at that time also that 9 those who hadn't been prosecuted would get a full 10 independent investigation but those who had been 11 prosecuted would get something a little less than that? 12 A. I think it probably was, yes, but I think, again, as 13 I go on to say in my witness statement, the two or 14 three -- at least two cases where prosecution had ensued 15 were included in the Second Sight review. 16 Q. Yes. Were ultimately included? 17 A. Correct. 18 Q. Perhaps we can see an email from yourself of the same 19 date to Alice Perkins and Paula Vennells. That's 20 POL00105472. You say: 21 "In addition, and following a review of the cases 22 listed, which I had not seen this before, I have been 23 giving some further thought to our position particularly 24 in respect of the cases where we have criminally 25 prosecuted the subpostmaster/mistress. I those cases, 62 1 I do not think that we want to be seen as reopening the 2 cases but rather position this as a review of existing 3 evidence to enable an understanding of the outstanding 4 concerns and the facts insofar as they concern the 5 Horizon system. For those who have not been prosecuted 6 we can offer a full independent investigation." 7 So that's very much echoing the views of Simon Baker 8 in that previous email? 9 A. Correct. 10 Q. Why would it be a problem if problems with Horizon were 11 identified in respect of those who had been convicted? 12 A. I suppose what I was thinking was that we should then 13 proceed and -- you know, forgive me, I'm lamentably 14 unqualified in the criminal piece of this, but what 15 I was concerned was they had gone through the courts and 16 they had been convicted and I thought we shouldn't 17 reopen that. 18 Q. But if there was new evidence that showed that that 19 conviction had been unfair -- 20 A. Exactly, yes. 21 Q. -- wasn't that something that positively should be 22 investigated? 23 A. Yes, I agree with you. It should have been and it was, 24 actually. 25 Q. But, as at June 2012, it was your position that they 63 1 shouldn't be. That was a mistake -- 2 A. That was -- sorry, I apologise. 3 Q. Was that a mistake on your part? 4 A. I think it was, yes. 5 Q. Can we please look at POL00096606. This is an email 6 exchange with Alice Perkins. If we can look at the 7 bottom email, please, 9 June 2012, from Alice Perkins. 8 She says as follows, she says: 9 "I am clear that we should include all the MPs' 10 cases, irrespective of whether they have been decided in 11 court. If we try to draw a distinction here we will be 12 accused of picking cases to suit ourselves and being 13 vulnerable on the ones we omit. We'll have a row about 14 that instead of moving the issue on. 15 "On reflection, I don't buy the argument that we 16 would somehow undermine the court process by doing this. 17 There are plenty of ways in which people go over ground 18 which has been settled in court and if there weren't, no 19 one would ever be able to get a conviction overturned. 20 And if (which we don't believe) there were new evidence 21 in a case which had been decided, we would want to do, 22 and be seen to do, the right thing by that." 23 She says: 24 "I am sorry to be bothering you with this on 25 a Saturday but time is against us, especially as Paula 64 1 is seeing James Arbuthnot on Monday afternoon and I feel 2 ... strongly about this." 3 Scrolling up, Paula Vennells responds, copies you 4 in, and she says: 5 "Alice, if Susan doesn't get back to you, I'm around 6 so call me on the mobile. I wasn't party to this part 7 of the discussion as it was when I was in the Eagle 8 meeting but we can talk and I can pick up with Susan on 9 Monday." 10 Then we see an email from Alwen Lyons summarising 11 the position to Paula, and she says: 12 "Paula in case Susan doesn't pick this up as she is 13 in Berlin and before you speak to Alice. The issue that 14 came to light with the list of MP cases was that they 15 included the [I think that's meant to be 'Misra'] case. 16 You will remember the case and the publicity. She went 17 to prison and had her baby whilst in there. The husband 18 got publicity through radio and press. Susan's anxiety 19 and she raised this at the meeting with Alice before you 20 joined was whether now contacting her to tell her we 21 review the case would be a red rag to a bull. 22 "Alice feels this is the business pushing back 23 unnecessarily and she feels this has happened throughout 24 the process and she is having to keep pushing us!" 25 So just looking at the Misra case, it seems as 65 1 though you were concerned at that time about the 2 publicity that had been raised by her conviction and 3 that now telling her that you were going to review her 4 case and look into whether or not there weren't issues 5 with Horizon would be a red rag to a bull. Was that 6 your position at that time? 7 A. I was very concerned about the situation, I understood 8 what had happened in the Misra case, which was clearly 9 very concerning, and I didn't want to reopen it unless 10 we had good reason to believe that there was an issue 11 there, but it was included on the list of cases to be 12 reviewed. 13 Q. It was ultimately included but it seems as though -- and 14 we see, at the bottom, Alice Perkins expressing quite 15 a strong view that these kinds of cases should be 16 included -- 17 A. Yes. 18 Q. -- but it seems as though you have expressed 19 a particularly strong view in respect of the Seema Misra 20 case, that because it was a highly publicised case, it 21 wasn't one that should be looked into? 22 A. My other concern around it was that it effectively 23 would, you know, dilute the publicity with regard to the 24 other cases that were being looked at. 25 Q. Because somebody who was put in prison and had a baby 66 1 there would get more publicity than other cases? 2 A. I think what I was concerned about was that, if we were 3 going to reopen this case, well, not reopen it but 4 investigate this case, it must be done appropriately and 5 we must then be able to move forward with the 6 conclusion. So, you know -- and I understand now around 7 the disclosure of information and the importance of 8 that. 9 Q. It might be that Seema Misra's case got a lot of 10 publicity because she was put in a terrible situation, 11 and -- 12 A. Absolutely. 13 Q. -- looking into the issues that she raised in her trial, 14 to see whether there was anything in it, might precisely 15 have been the very thing to do at that time? 16 A. I agree. 17 Q. Why didn't you agree at the time? 18 A. I was too shortsighted, maybe. 19 Q. It looks as though, as at 9 June 2012, you wanted 20 a narrow review, not looking at decided cases and, at 21 this time -- we're going to go on to talk about what 22 happens later -- but, at this time, June 2012, Alice 23 Perkins thought that it should be wider, all MPs' cases, 24 she refers to being seen to do the right thing, the 25 business was pushing back, it seems. Do you agree with 67 1 that characterisation of the difference in those two 2 positions? 3 A. Probably, yes. 4 Q. I'm going to move on to 2013. Can we please look at 5 POL00059567. Can we start on page 2. 6 Second Sight had been carrying out their 7 investigation for some time now, by January 2013. Ron 8 Warmington emails Simon Baker, Ian Henderson and you and 9 others, and he says: 10 "Hello Rod/all: As just mentioned, I'm afraid we now 11 have to seek information on the time it has taken to 12 notify the [subpostmasters] (in our sample) about 13 [transaction corrections]. 14 "The issue here is whether [subpostmasters] have 15 been able to get to the bottom of a [transaction 16 correction] in the event that they have been unable to 17 print out, or even to view on screen, the underlying 18 transactions that went through (and in some cases were 19 also reversed) on the day of the challenged transaction. 20 "What we need to establish is: how many of the 21 [transaction corrections] (that were raised in the 32 22 cases that we now have in our sample) were notified to 23 the [subpostmasters] after 42 days had expired." 24 So, in essence, how many subpostmasters were 25 notified too late about the transaction corrections? 68 1 If we scroll up, we can see an email from you to 2 Alwen Lyons, and you say: 3 "But this is not Horizon ... How do we box this 4 off?" 5 So by early 2013, were you trying to confine the 6 areas that Second Sight were looking into? 7 A. I think I was just trying to understand what it was. 8 Q. But you weren't trying to understand: you weren't 9 saying, "What is this?" You were saying, "How do we box 10 this off?" 11 A. Well, how do we resolve the issue. So with transaction 12 corrections. 13 Q. Does "box off" mean resolve the issue or does "box off" 14 mean prevent the issue from being looked into? 15 A. So I think, in the context there, I wanted to understand 16 what the issue was because -- 17 Q. Well, I mean, you're not asking there what the issue is; 18 you're saying, effectively, how do we stop this being 19 looked into, aren't you? 20 A. No, I don't think. So I think if you go further down my 21 recollection is from Ron's email that he talks about the 22 delay in transaction corrections coming through and the 23 difficulty that subpostmasters have in reconciling those 24 transaction corrections because of the delay that's 25 coming through. 69 1 Q. Yes. 2 A. So, yeah, I think I just wanted to understand what the 3 issue was. 4 Q. The suggestion from your email seems to be that that 5 isn't fairly and squarely within the issue of the 6 Horizon system; that's to do with the transaction 7 corrections and, therefore, that shouldn't be something 8 that Second Sight are looking into; am I unfair in that 9 suggestion? 10 A. I think so because what I was trying to say is how does 11 this all fit together? Because transaction corrections 12 come from a different system, didn't they? I thought. 13 I didn't know. 14 Q. So your expression "box this off", it is your evidence 15 to the Inquiry that that is, in fact, a request to look 16 into something more rather than not look into something? 17 A. That's what I think, yes, that's what my recollection 18 would be. 19 Q. Do you think that's a reasonable interpretation of those 20 words? 21 A. No, I don't. 22 Q. What do you mean by that? 23 A. So I think it could be read in "How do I box this off". 24 I think what I was trying to say is how do these fit 25 together with Horizon? So, if they're not in the 70 1 Horizon system, how does it all fit together? 2 Q. It's answered by Simon Baker, if we scroll up, please -- 3 sorry, actually, if we go to the top email, it's 4 answered by Alwen Lyons, and she says as follows: 5 "So you are right not a Horizon issue but Ron's 6 point is that if [transaction corrections] come late and 7 there was a Horizon issue [subpostmasters] have no 8 chance to look at the evidence." 9 A. Yes. 10 Q. So she's making clear to you there that, in fact, 11 although it's not technically an issue with the Horizon 12 system, it's an issue with your processes, which means 13 that subpostmasters wouldn't, in fact, have a chance to 14 look at the evidence because they wouldn't know whether 15 their transaction correction is being accepted or not? 16 A. Yes. 17 Q. Do you think, at that time, you and others in the 18 business were genuinely interested in Second Sight 19 investigating those kinds of issues? 20 A. Yes, I do. 21 Q. Because what appears to be happening is that we've gone 22 from a situation where we have Second Sight and Deloitte 23 making different proposals -- one included a highly 24 technical review of the system -- Second Sight winning 25 the contract, to trying to narrow the scope, for example 71 1 we saw your email about not including those who are 2 convicted of criminal offences, and here it looks as 3 though, a reading of that email correspondence, is that 4 they're trying to narrow the scope further to confine 5 them simply to the Horizon system itself? Do you agree 6 with that or not agree with that? 7 A. No, I mean, I think the intention, and certainly from 8 the beginning, was that they should look at the MPs' 9 cases and, in order to do that, they needed to have the 10 ability to go -- I mean, as their proposal said -- to go 11 outside of Horizon and, as their definition in the 12 interim report says, that it was much broader than 13 Horizon in terms of training, support, how 14 subpostmasters were more generally dealt with. 15 Q. So am I to understand that there wasn't an attempt at 16 this stage by the Post Office to confine the scope of 17 Second Sight's review? 18 A. That's my recollection. My recollection was that we 19 wanted to have review done on the cases raised by the 20 MPs. 21 Q. Can we please look at POL00144482, 22 April 2013, email 22 from Simon Baker to you, Alwen Lyons and Lesley Sewell. 23 This refers to a letter from James Arbuthnot to Alan 24 Bates, and he says: 25 "The key points to me in the letter from [James 72 1 Arbuthnot] to Alan Bates are: 2 "His suggestion that Second Sight focus their 3 efforts on the two best MP cases. 4 "As 'result' -- even if preliminary, by the summer. 5 "He doesn't respond to Alan Bates' request to focus 6 the investigation on 'systemic failures'. 7 "He says Alan Bates' request for [Post Office] to 8 continue to fund Kay Linnell is for Alan Bates to take 9 up with the Post Office." 10 Then he says this: 11 "This gives us the opportunity to really contain the 12 scope of the investigation." 13 Now, that is inconsistent with the evidence that 14 you've just given on containing the scope of the 15 investigation. Why would it be that, in April 2013, 16 Simon Baker felt able to say to you that there was scope 17 to "really contain the scope of the investigation"? 18 A. I think we were finding, from a practical point of view, 19 that investigation was taking a lot longer than we had 20 anticipated, that there'd been -- that we weren't 21 getting through the cases or that Second Sight wasn't 22 able to get through the cases in the sense -- in 23 a timing sense, that we had hoped, and that we needed to 24 get to some conclusion on some of the cases. 25 So that's -- so I mean it's really down to his 73 1 recommendation and also what we needed to have in terms 2 of updating James Arbuthnot and what has to be included 3 in the report to go -- and I can't remember when we 4 agreed to do it but the report had to go back to James 5 Arbuthnot and the MPs before the summer recess. 6 Q. Aren't the words that are highlighted on the screen 7 there entirely consistent with the email that I took you 8 to from you, saying that you needed to "box off" 9 an issue? Don't they both suggest together that, in 10 early 2013, the Post Office was trying to reduce the 11 scope of Second Sight or contain the scope of Second 12 Sight's investigation? 13 A. It wasn't my intention to restrain or contain the scope 14 but I was concerned that we needed to get to some 15 determination on the MPs' cases and I can't remember 16 when they developed the concept of the Spot Reviews, 17 because that was -- sort of, again, was trying to move 18 the investigation forward. 19 Q. Do the words here make you revisit the words that we saw 20 just before about boxing off the investigation or is it 21 still your evidence that that wasn't trying to reduce 22 the scope of the investigation? 23 A. I don't think I was; I think was trying to understand 24 how it all fitted together. 25 Q. He says, as follows: 74 1 "My recommendation is that we take advantage of this 2 and draft a letter from Paula/Alice to James where we 3 suggest the following: 4 "1. We are concerned about the overrun of cost and 5 time of the investigation, noting it has been running 6 for a year and to date no evidence of systemic failures 7 have been found. 8 "2. To move forward we suggest that Second Sight 9 complete two in-depth MP cases -- selecting the ones 10 that they feel indicate systemic problems. 11 "3. Post Office respond to the four Spot Reviews 12 ... 13 "4. We meet [James Arbuthnot] in June ... 14 "5. Set the expectation that when we meet in June, 15 unless there is strong evidence of any system failures 16 we will close the investigation at that point." 17 It certainly seems as though, in early 2013, the 18 line from the Post Office is that "Progress needs to be 19 made, we are concerned about the cost and the time and, 20 if there isn't evidence by the summer, we should close 21 the investigation". Was that a view that you shared? 22 A. No, I understood from the Chair that we needed to review 23 the MPs' cases and we were going to do that through the 24 Second Sight process. I do agree that we were concerned 25 about the overrun of costs and time and we were 75 1 concerned about the efficiency of the process going 2 forward, and, I think, actually, that was a concern 3 shared by Second Sight. 4 Q. As the year progressed, was the Post Office increasingly 5 concerned about the way that Second Sight were finding 6 issues with Horizon? 7 A. I don't know about more generally but I felt it was -- 8 I still felt it was important for them to review the 9 MPs' cases and, to the extent I was frustrated, it was 10 because of what I felt was a lack of progress and I'd 11 stress that, you know, in the beginning, we were late 12 and slow in getting them documents and implementation 13 and we had to develop a system to assist them, so the 14 scanning system we put in place. 15 Q. Were you not increasingly concerned about the potential 16 findings of Second Sight? 17 A. No, it was an independent report and they had -- so my 18 attitude was with Second Sight that I tried to make sure 19 they got the information they asked for in a timely 20 fashion and that they were assisted in the way that we 21 could assist them in coming to their conclusions. But 22 I do agree there was concern about the level of cost and 23 the level of resource it was taking up. 24 Q. Can we please see POL00189210. We're in June now, so 25 the time at which progress had to be made or it would be 76 1 shut down. Can we scroll down to the bottom, please. 2 We have an email from you to Ron Warmington, saying: 3 "Hi from sunny Croatia -- given the short timescales 4 wondered how things were going with the report?" 5 I think you were on holiday at that time. Had you 6 been tasked by somebody to chase the Second Sight 7 Report? 8 A. No, I don't recollect that, no. 9 Q. If we have a look at the response from Mr Warmington, he 10 says: 11 "Wow ... Croatia? Are you trying to get far enough 12 away that the shock wave won't impact?" 13 Were you aware, at that stage, of a potential shock 14 wave arising from Second Sight's report? 15 A. No, I don't think so. I mean, we had been through the 16 sort of -- I can't -- no, I don't think I was. I mean, 17 it was an independent report and it had to be allowed to 18 be an independent report. 19 Q. He says: 20 "Seriously, it's all getting a bit heated, not least 21 because of the need to disclose those two Horizon 22 'defects' (Gareth Jenkins called them 'bugs' in his 23 report) that impacted 77 sub post offices and result in 24 some [subpostmasters] 'being asked to make good 25 an incorrect amount' (wording from Gareth's [report]. 77 1 "The problem is that, in answer to James' question 2 (which he is bound to ask): 'Have you (Second Sight) 3 found any instances of a defect in Horizon that led to 4 a shortage for which any [subpostmaster] was held 5 accountable?' The answer might not be 'No' ... but, in 6 any event, [the Post Office] had disclosed two software 7 defects that did have that effect, albeit [the Post 8 Office] dealt with them very properly and wrote off the 9 differences that had arisen. That correction process 10 looks to have taken place over a year in regard to the 11 differences arising from one of the defects, however." 12 He continues and says: 13 "We are also still trying to bottom out the Rudkin 14 matter and that looks as though it will go to the wire." 15 Is that the issue of remote access or what we refer 16 to as "remote access"? 17 A. The Rudkin matter, yes, I think it is. 18 Q. He refers to Horizon defects and he says: 19 "... Gareth Jenkins calls them 'bugs' in his report 20 ..." 21 Do you recall there being an issue within the Post 22 Office referring to "bugs" and trying to change the 23 wording? 24 A. Not from my point of view, no. I mean, I would tend to 25 use the word "defects", in any event, because I think 78 1 "bugs" is a bit slang. 2 Q. Pardon? 3 A. I think just using the word "bugs" is sort of a bit not 4 precise, so I would use the word "defects". 5 Q. Gareth Jenkins was a Fujitsu engineer? 6 A. He was, yes. 7 Q. He was highly knowledgeable about the Horizon system. 8 If he called them "bugs", what's wrong with calling them 9 "bugs"? 10 A. Just a different style. 11 Q. Just a different style? 12 A. Well ... 13 Q. Can we please look at POL00380985. It seems that by 14 July 2013, there is discussion within the business at 15 the highest levels about changing the language that's 16 used about these bugs. We see here, 2 July, if we have 17 a look down at the bottom email, it looks as though the 18 question has been posed: 19 "What is a non-emotive word for computer bugs, 20 glitches, defects that happen as a matter of course?" 21 Paula Vennells emails as follows, she says: 22 "My engineer/computer literate husband sent the 23 following reply to the question ..." 24 The answer is: 25 "Exception or anomaly. You can also say conditional 79 1 exception/anomaly which only manifests itself under 2 unforeseen circumstances ..." 3 Then there are two kisses. She says: 4 "Does that help?" 5 The kisses were for her, she thinks. She says: 6 "Thank you for the work." 7 If we look up to the response from Mark Davies -- so 8 Mark Davies was the Commissions Head at the Post Office 9 at the time, is that right -- 10 A. As I recall, yes. 11 Q. -- to her, to Paula Vennells, you're copied in, and he 12 says: 13 "I like exception [very] much. 14 "Very helpful." 15 I know that you said that you had issue with the 16 word "bugs" because it seemed to you to be slang, 17 despite being used by Gareth Jenkins but can you recall, 18 at the same time, at the very top of the business, 19 discussion about using less emotive language for what 20 was occurring? 21 A. I'm sorry, I really don't recall that there was. 22 I really don't recall that email. 23 Q. You don't recall that there was discussion about using 24 less emotive language? 25 A. I don't think so, no. 80 1 Q. Can we please look at POL00190361. It seems around the 2 same time, the next day, there is discussion with 3 lawyers, CMS, to look at the legal implications of 4 Second Sight's Interim Report for potentially defamatory 5 content. Do you recall around exactly that time the 6 Post Office seeking to challenge, potentially, Second 7 Sight's Interim Report? 8 A. I didn't recall this. It came through in the last lot 9 of disclosures. I think it was probably -- well, I'm 10 assuming it's probably from the -- as a request from the 11 Comms Team. 12 Q. If we have a look at POL00190619, it does seem that you 13 were involved in requesting such advice. POL00190619, 14 thank you. 15 Could we have a look at the penultimate page, 16 please. Susan Barty, a partner at CMS Cameron McKenna, 17 says: 18 "Dear Susan and Hugh 19 "You have asked for my opinion as to whether we can 20 obtain an injunction in relation to the Second Sight 21 Report." 22 Do you recall seeking legal advice trying to injunct 23 the Second Sight Interim Report? 24 A. I don't know. I really don't recall that. 25 Q. Do you recall at least that, as at this time where 81 1 discussions are being had as to references to bugs and 2 how to describe them, there were also attempts to 3 prevent Second Sight's Report from being released? 4 A. No, I don't recall that. 5 Q. Can we please turn now to POL00145100, and we're back on 6 the issue of description of bugs. Over to the second 7 page, please, we have a speaking note. It's an email 8 from Martin Edwards. If we scroll down, he says: 9 "Alice, Paula 10 "With many thanks to Susan, Alwen, Mark and everyone 11 else involved, here's the briefing note for the meeting 12 with [James Arbuthnot]." 13 Do you recall in July -- so exactly the same day, in 14 fact, as the injunction against Second Sight's Report is 15 being discussed -- being part of a group who drafted 16 a briefing note for the meeting with James Arbuthnot? 17 A. I don't recall it no but, obviously, I was. 18 Q. If we scroll down, please, "Briefing note with James 19 Arbuthnot, 3 July 2013". Can we scroll down. We see 20 over the page the beginning of speaking notes. Over to 21 page 4, please, it says as follows: 22 "From what we've been told by [Second Sight] so far, 23 there is no evidence in the interim report to support 24 any suggestion of systemic failures with the Horizon 25 system (and this is based on the four 'best' cases from 82 1 all those under review). 2 "If this is the case, important that point is 3 communicated [early] given some of the original 4 allegations about the system -- otherwise computer and 5 agent confidence in the integrity of the system could be 6 fundamentally undermined." 7 Then it says as follows: 8 "This is not to belittle the importance of the 9 overall user experience for [subpostmasters]. It is 10 essential that we continue to improve our wider systems 11 of support and training for agents, and we are grateful 12 for many of the additional insights generated by this 13 investigation to date. Many of these process issues are 14 historical and have already been rectified to improve 15 guidance to staff and training for [subpostmasters] -- 16 but where further changes need to be made we will 17 absolutely act on them." 18 Do you recall at that stage a shift to the focus 19 being on the wider Horizon system and not on the 20 computer system itself? So to include, for example, the 21 support that's being provided to subpostmasters? 22 A. So when the Second Sight Report or investigation was 23 started, it was the case that they were going to look at 24 the broader Horizon issues, in terms of support for 25 subpostmasters, a Helpdesk, NBSC, so a much more -- 83 1 a much broader investigation than just the Horizon 2 system as it related to subpostmasters, and the MPs' 3 cases. So I think that's consistent with the commentary 4 here. 5 I also think that, because of the delays in the 6 report, we were trying to say, you know, they've looked 7 at their four best cases and, currently, they don't have 8 evidence to support the suggestion of systemic failures. 9 Q. Can we please move to page 6 of this briefing note and 10 it's here that I want to focus before we take our second 11 break. There is a heading "System exceptions", and it 12 says as follows: 13 "We know of two system exceptions (anomalies) under 14 the current Horizon system where [subpostmasters'] 15 accounts have been affected, and both were voluntary 16 communicated to [Second Sight] (although not directly 17 related to cases under review). 18 "Key point to note is that in both cases our 19 processes picked up these issues, appropriate remedial 20 action has been taken and they did not lead to any 21 disciplinary action against the affected 22 [subpostmasters]. 23 "Absolutely no reason to believe this means there 24 are other undiscovered issues." 25 If we scroll down then, please, it then gives 84 1 "Further detail of the two cases if required", and 2 there's reference there to the "62 branches exception". 3 Can you see everything is now being called an 4 "exception" rather than a "bug"? We know this as the 5 receipts and payments mismatch bug, I think Gareth 6 Jenkins knows this as the receipts and payments mismatch 7 bug, but it's now being called the "62 branches 8 exception". 9 If we scroll down: the "14 branches exception". 10 I mean, are we to understand here that words that 11 were suggested by Paula Vennells' husband have now made 12 their way into the terminology that's being used by the 13 business? 14 A. That's certainly what it looks like. 15 Q. You were, it seems, part of the group that drafted this 16 briefing note. So do you really not have any 17 recollection of the word "exception" now being used 18 instead of "bug"? 19 A. No, I don't. I would have given input around the Second 20 Sight Report. 21 Q. It's absolutely Orwellian, isn't it, the use of the word 22 "exception" now instead of "bug"; changing the language 23 within the company; crafting a briefing that now refers 24 to exception? Did you not take responsibility for that 25 briefing, given that you were one of the people drafting 85 1 it? 2 A. If I had solely drafted it, if it had been my work, then 3 I would have taken responsibility or would take 4 responsibility for it. I don't have -- I can't remember 5 that. 6 Q. If we look at page 1, Lesley Sewell emails Martin 7 Edwards and says: 8 "Just to be clear -- these were not undiscovered 9 issues, we brought them to [Second Sight's] attention 10 for completeness. Also, when Susan and I were crafting 11 the briefing we were careful in our own wording as these 12 were associated with potential losses to 13 [subpostmasters] in their trading statements." 14 Lesley Sewell certainly seems to be suggesting that 15 you were crafting the briefing and being careful about 16 your choice of language; do you agree with that or not? 17 A. I do agree with that, yes. 18 Q. Do you think Lesley Sewell was mistaken about that? 19 A. No, I think she was right. My recollection must be 20 mistaken. 21 Q. It says: 22 "We need to be careful in our comms not to indicate 23 that we do not have anomalies or exceptions as that is 24 not the case -- it's the context which is important and 25 in this case the fact that they could and did affect 86 1 Trading Statements." 2 So "We need to be careful in our comms not to 3 indicate that we do not have anomalies and exceptions"; 4 the wording here that's being used, is there an element 5 of smoke and mirrors about the whole thing now? 6 A. It certainly reads in that way, yes. 7 MR BLAKE: Sir, that's an appropriate moment to take our 8 second morning break. Could we please return at 12.15? 9 SIR WYN WILLIAMS: Yes, certainly, Mr Blake. Thank you very 10 much. 11 MR BLAKE: Thank you very much. 12 (12.05 pm) 13 (A short break) 14 (12.15 pm) 15 MR BLAKE: Thank you. 16 Can we please look at POL00190429. A meeting takes 17 place with Second Sight on 3 July with Second Sight, 18 Paula Vennells, you and Alwen Lyons; do you recall this 19 meeting? 20 A. No, but we have the notes here. 21 Q. This is 3 July, so it's a day after Ms Vennells' 22 husband's feedback on language to be used and it is also 23 the day of those emails that we saw in relation to 24 trying to think about an injunction in relation to 25 Second Sight's report. It reads as follows: 87 1 "At the beginning of the meeting 2 "James reported that you had told him last week that 3 you had 'nailed' something and that your interim report 4 would show real concerns in the whole process. 5 "He thought there was a risk that people had been 6 prosecuted and were still being prosecuted based on the 7 system, process and software which was not [operating] 8 correctly leading to miscarriages of justice. 9 "He said he wanted to work with us and that the 10 report could be a 'triumph' for the Post Office. 11 "Body of the meeting 12 "Need to [be] very clear about the definition of 13 Horizon." 14 That's something that I was mentioning before, that 15 it seems as though there is an increasing focus now on 16 separating out Horizon as a computer system and Horizon 17 as a system that involves the processes of support and 18 training, et cetera: 19 "We accepted that [Second Sight] were also looking 20 at the wider system, but that we need to be clear, 21 cannot misrepresent what Horizon -- the computer system 22 means. 23 "Discussed the anomalies which [the Post Office] had 24 bought to the attention of [Second Sight] during the 25 review." 88 1 Do you see there that the word "anomalies" is 2 already being used, just one day in? 3 A. Yes, I noticed that. 4 Q. "The 64 and 14 cases. He accepted that these are things 5 found in all computer programs and suggested that we use 6 an example of other systems to make that live. He 7 accepted that the most important thing was how they had 8 been managed. 9 "Anomalies will lead subpostmasters to doubt the 10 system, so we need to be clear that this is normal in 11 a system of this size." 12 He says: 13 "James was very concerned about an email which 14 suggested that Product and Branch Accounts could be 15 remotely journalled without the subpostmaster's 16 knowledge. We need to be clear about what happening 17 here." 18 Am I right in saying, and we will come to it later, 19 but that concerns the issue of what we know as remote 20 access? 21 A. Yes, I think that -- yes, that was the issue that 22 Mr Rudkin flagged, I think. I can't remember but ... 23 Q. There is then a meeting at Bond Dickinson on 10 July. 24 Can we please have a look at POL00407582. It seems as 25 though you attended, with Hugh Flemington, a meeting at 89 1 Bond Dickinson with Simon Richardson; do you recall that 2 meeting at all? 3 A. I had a feeling he'd come to us but I don't recall the 4 meeting but, yeah, we have the notes. 5 Q. The location is empty so it may well have been a meeting 6 at your offices. 7 A. Yeah. 8 Q. If we scroll down, 10 July 2013, he or somebody has 9 said: 10 "The Board want to sack [Second Sight] and of course 11 are now not coping well with the fact that they are 12 independent. SC [I think that's you] is going to 13 arrange to meet [Second Sight] and she asked if she 14 could use our offices next Tuesday. I said I could sort 15 out a room for her." 16 Do you recall who said that the Board wanted to sack 17 Second Sight; was that your knowledge? 18 A. I can't remember who said it. 19 Q. But you recall that that was the position of the Board 20 at that time? 21 A. I think they were -- what was the date of this, 10 July? 22 Q. Yes. 23 A. I can't recall that they actually said that but it was 24 my understanding that they were very unhappy with the 25 tenor of the report. 90 1 Q. Was that the whole Board or particular individuals 2 within the Board? 3 A. I don't know. I suspect I only got a blended view. 4 Q. Paragraph 4: 5 "She thought it would also be essential to have 6 a session looking at the strategic options and perhaps 7 involving a QC but she did not want to go back to the 8 one they had used before. She had found him patronising 9 and irritating." 10 Was that Mr Morgan? 11 A. Possibly. 12 Q. So it looks as though you're considering a legal route? 13 A. So what I was -- so my recollection in relation to this 14 note is that -- and it's something I have alluded to 15 before -- the position we'd reached with Second Sight, 16 they'd got so far down the track with quite a number of 17 the cases and I was trying to find a way through that 18 they would be able to complete their review more quickly 19 or more efficiently. But I was also starting to take 20 the view that it might not be the right thing to do to 21 leave that process as it was, and I talked to Ian and 22 Ron about it -- Second Sight, rather, about it, as to 23 how we would manage this going forward. 24 Q. It continues, paragraph 6: 25 "The real worry was around Fujitsu expert who 91 1 appeared to have known of some of the problems but not 2 referred to them in his report or statement even though 3 they could be dismissed. There are non-disclosure 4 issues here. They are looking at replacing that expert 5 with somebody else." 6 Was that a concern of yours? 7 A. To replace the expert or to -- 8 Q. No, that there had been a Fujitsu expert who had known 9 about some of the problems referred to in the report? 10 I think that's a reference to Mr Jenkins? 11 A. Yes, and also the work that Cartwright King were doing 12 in terms of the disclosure. So I think, by that stage, 13 we'd started to do the Sift Review -- or they had 14 started to do, shall I say, the Sift Review of the file 15 and I was concerned that we made quick progress with 16 that, so that that information could be passed up to the 17 defence solicitors or counsel and also to the 18 subpostmaster where appropriate. So I think that's what 19 I'm referring to there. 20 Q. But that real worry, it seems, about the reliability of 21 Mr Jenkins' evidence, which was in court proceedings, 22 was that something -- I mean, we have here you attending 23 with Hugh Flemington, so did you pass that up the chain? 24 A. The real worry? 25 Q. (a) The worry and (b) the fact that a Fujitsu expert 92 1 knew about problems and hadn't necessarily provided 2 a full and accurate picture in evidence? 3 A. Yes, I did. 4 Q. Who did you tell about that? 5 A. I think I flagged it to Paula and also to the Board. 6 Q. We're here on 10 July; was it before the 10 July meeting 7 or was it after? 8 A. I think -- I really can't remember the timescale. There 9 was so much going on at the time. 10 Q. But the summer of 2013? 11 A. Oh, yes. I mean, in July. 12 Q. It then says: 13 "There was generally an overall defensive air and 14 the Board are also feeling bruised. There are tensions 15 between people and that includes Alice Perkins (the 16 Chair), Paula Vennells (CEO) and [you]." 17 Can you assist us with what those tensions were at 18 that time? 19 A. I felt that I was trying to ensure that the Second Sight 20 review was independent and, by that, I meant that they 21 had been given the appropriate level of support and 22 information to enable them to deliver the report but 23 I hadn't -- I had not -- and I can't remember whether it 24 was expressed to me at this stage or not -- but I felt 25 that I was being accused of not managing the process 93 1 properly, of not controlling the process enough. But my 2 view was that this is an independent report and, 3 therefore, it has to be Second Sight Report; it's not 4 our report at the Post Office. 5 Q. "I said [that] the Minister had dealt with the questions 6 extremely well and looked in control of the brief. 7 Evidently she had [the Post Office] in to tear them off 8 a strip for not putting someone up earlier in the day 9 for interviews on Radio and TV." 10 Was there also tensions, as you understood it, with 11 the Minister? 12 A. That's as I understood it, yes. 13 Q. Can we please look at POL00027548. 14 SIR WYN WILLIAMS: Mr Blake, before you ask questions about 15 that, can I just clear my mind? 16 That paragraph 6 that you referred Ms Crichton to, 17 in terms of the date, had the Simon Clarke written 18 advice been delivered to Post Office by the time of this 19 meeting or did that come a few days later? 20 MR BLAKE: The Simon Clarke advice relating to Gareth 21 Jenkins was 15 July; this meeting is 3 July. 22 SIR WYN WILLIAMS: Exactly so. So -- 23 MR BLAKE: Sorry, this meeting is 10 July, so this pre-dates 24 the formal advice from Simon Clarke. 25 SIR WYN WILLIAMS: It pre-dates the formal advice but, 94 1 clearly, Ms Crichton, what Mr Clarke was going to put in 2 writing must, in some shape or form, have reached you 3 and others in the Post Office? 4 A. Yes, so my memory -- and I think it's either in my 5 statement or in some of the documentation -- is that 6 they came down to London, I think, on 3 July. I can't 7 remember, actually, so I think they came down to London 8 and we had a meeting and I asked them to put their 9 advice in writing but I also asked them to start the 10 review sift disclosure. I think that's the timeline. 11 SIR WYN WILLIAMS: Right, I understand. Thank you. 12 MR BLAKE: Was Paula Vennells aware before the formal advice 13 had been received, or after, or are you not able to 14 assist? 15 A. I can't recollect but I would have thought it was likely 16 that it would be before the formal advice was received 17 but I really -- I can't recollect exactly and I think it 18 was complicated by the fact that she was going off on 19 holiday and, again, I can't remember those exact dates. 20 Q. We've seen, from the correspondence and the meetings 21 that took place around this time, real concerns at the 22 Board level and also there's also reference in that note 23 that I just took you to about tensions between you and 24 the Chair and the CEO. Were you, at this stage, coming 25 under pressure in relation to Second Sight's report and 95 1 the discoveries that they had included in that report? 2 A. So my recollection is that -- not necessarily pressure. 3 I did feel there was a view -- and I can't ascribe that 4 view particularly to anybody -- that I hadn't managed 5 the process well and my view was that it was 6 an independent process and had to be allowed to be 7 independent in those terms. 8 Q. Did you, in any way, feel that you had to adjust the way 9 that you carried out your work in order to satisfy the 10 CEO or Chair? 11 A. I don't think I did. I think I remained of the view 12 that this was to be an independent report and what I did 13 do is talk to Ian and Ron and we had -- Second Sight -- 14 and we had a conversation around their report being 15 evidence driven, and I think that took place probably 16 around 1 July. And then I remember that Second Sight 17 issued another version, I think, which was the version, 18 I think, that was then published. 19 Q. In respect of that version, were you concerned by it, 20 were you happy that it had revealed certain things about 21 Horizon? 22 A. I remember being content that it was an evidence-driven 23 report from the issues they had discovered as part of 24 their investigation. I remember being concerned about 25 the length of time it was taking to come to those 96 1 conclusions and, as I say, that was partly due to the 2 Post Office delay in getting them information. Those 3 are the things -- that's my recollection at the time. 4 Q. Can we please look at POL00027548, please. I'm just 5 going to look at some of the actions that you carried 6 out in July 2013. This is a document, I think this is 7 the report for the Board of July 2013. It has your name 8 at the bottom, 11 July. We see there an update on the 9 status of various Horizon claims, and it says: 10 "On 8 July 2013, Second Sight provided an interim 11 report ... This the subject of a standalone report ..." 12 We're going to have a look at that report: 13 "Second Sight's initial findings ... conclude that 14 while there are no systemic problems with horizon, there 15 are two specific 'bugs', which give rise to errors in 16 a number of branches' accounts. Second Sight also 17 highlighted shortcomings in the Post Office's internal 18 training and support to subpostmasters in relation to 19 the Horizon system." 20 So you there refer to -- I think you use the words 21 that were perhaps used in the Second Sight Report of two 22 specific bugs. Can we please look at POL00145427. This 23 relates to the Board paper that is said in this table to 24 be subject to a standalone paper. We're going to look 25 at the drafting process of that paper. 97 1 We have here, 12 July, an email from yourself to 2 Alwen Lyons, and you had been sent an earlier version of 3 the board paper. You say: 4 "Hi you must have read my mind whilst I was out 5 walking the dog I suddenly thought that it wasn't a good 6 idea to mention 'bugs' so have changed that and also 7 found another couple of typos -- the recommendation is 8 much better. 9 "Thanks." 10 So your evidence before our break was that you 11 couldn't remember changing the word "bugs" to other 12 words but it seems very clear that that was at the 13 forefront of your mind on the 12 July 2013? 14 A. That's certainly what this email says, yes. 15 Q. We can see the earlier draft of the document that you've 16 been commenting on and that can be found at POL00145421. 17 This is an earlier draft of the Board paper and, if we 18 look at the "Background" section, it says: 19 "As the Board are aware Second Sight have now 20 published their interim report and this Board paper 21 considers the options/proposes a course of conduct for 22 Post Office. 23 "Following publication and the MPs' meeting 24 a statement was made in the House of Commons ... various 25 MPs have raised issues ... The main concerns seem to 98 1 focus on: 2 "The fact that people have gone to prison." 3 Then it says: 4 "The fact that there have been some bugs in the 5 Horizon system (albeit that [Second Sight] have found no 6 systemic problems)." 7 If we look at the later version that's produced -- 8 and that can be found at POL00145428 -- we see the 9 updated version. If we scroll down, we see it's now 10 been changed to: 11 "The fact that there have been some defects in the 12 Horizon system ..." 13 So the word "bugs" there has now been changed to 14 "defects"? 15 A. Correct. 16 Q. Do you recall making that change? 17 A. I think I must have been done. So I don't recall but 18 I'm the author of the paper, so I must have done. 19 Q. What would the reaction of the Board have been, if it 20 had remained in its original version and said "bugs" in 21 the Horizon system? 22 A. I don't know. 23 Q. Were there topics or words that you thought weren't 24 a good idea to mention to the Board or to use before the 25 board? 99 1 A. No, I don't think so. 2 Q. Was there a culture of some sort about not speaking 3 openly about bugs? 4 A. Not that I recollect, particularly. 5 Q. You ultimately produced this paper for the Board. 6 I want to take you to an earlier draft and can we please 7 look at POL00191680. So the email I took you to before 8 about walking the dog and suddenly thinking that it 9 wasn't a good idea to mention bugs, that was 12 July. 10 A. Right. 11 Q. We have here a draft being sent to you by Hugh 12 Flemington, 10 July. I'd like to look at that draft, 13 please, it's POL00191681. He says: 14 "This is where I got to." 15 This is a much earlier draft. Can we please look at 16 page 5 of this and scroll down to "Options on 'Claims'". 17 Thank you. Is it possible to bring on to screen another 18 version that we just looked at, it's POL00145428, 19 please. 20 It's page 3 of that other document, if we could have 21 those two side by side, please. Thank you. Page 3 of 22 the left-hand side. If we could scroll down, please, on 23 the left-hand side to -- that's fine, if we could scroll 24 up slightly, sorry where you were before. Thank you. 25 Let's look at these next steps, originally they were 100 1 called "Options on 'Claims'" and referred to two 2 options. You had, on the right-hand side, in the 3 original or earlier version, a "Reactive approach": 4 "... we wait for any criminal case to be overturned 5 and for claims for compensation to be made. We then 6 decide whether to settle or fight these on probably 7 a case-by-case basis." 8 Or you have a "Proactive approach": 9 "... where following the publicity in the wake of 10 [Second Sight's] interim report, Post Office could 11 proactively invite subpostmasters and former 12 subpostmasters to contact us and raise issues. There is 13 a material and significant risk in the proactive 14 approach, not least because it will lead subpostmasters 15 to expect compensation and whilst we may have to pay 16 compensation if we are found to be in the wrong ..." 17 It seems as though "wording", that might be 18 a suggestion to insert some sort of wording: 19 "... these claims could be considerable, 20 eg excluding the criminal cases, loss to business/home/ 21 marriage breakdown/ill health." 22 Then there's a positive recommendation to the Board 23 in this original draft: 24 "The recommendation is to adopt a reactive approach 25 and assess individual claims on their merits as and when 101 1 they arise. Where it is considered that there is little 2 chance of success for the defendant that Post Office 3 should defend the claim. This could give rise to the 4 accusation that Post Office is being 'bullying and 5 unsympathetic'. There is clearly a balance which is 6 required with regards to legal costs and paying 7 compensation to defendants and a policy will need to be 8 developed." 9 The final version is on the left-hand side and that 10 says, as follows, it gives two next steps: 11 "A Proactive approach -- there are a number of areas 12 where the Post Office wishes to take a proactive 13 approach, for instance looking at processes for managing 14 our relationship with our subpostmasters." 15 Then it says: 16 "Further details will be shared at the meeting. 17 "A Reactive approach -- in respect of the criminal 18 cases the Post Office should wait for those to be 19 overturned via the Court of Appeal and for claims for 20 compensation to be made. We then decide whether to 21 settle or fight these on a case-by-case basis." 22 So it certainly seems that, by 12 July, in the final 23 paper to the Board, the proposal was that, in criminal 24 cases, you don't take a proactive approach and assist 25 subpostmasters but you wait for them to come to you; is 102 1 that correct? 2 A. I think by 12 July, the Cartwright King sift had already 3 started. I'd need to go back and check the dates but I'm 4 pretty sure -- again, I'd have to check the dates, but 5 I think they came to see me on 3 July and I asked them 6 to sort of start the sift at that point. So, basically, 7 they came with a proposal as to what needed to be done 8 in respect of the disclosure required by the Second 9 Sight Report and the other -- the Helen Rose report and 10 I asked them to start that process straightaway and then 11 that process then involved the disclosure of those 12 reports to either the subpostmasters or to the 13 solicitors acting for them. 14 Q. What you're not doing is the right-hand side proactive 15 approach, which is to invite subpostmasters and former 16 subpostmasters to contact you? 17 A. I think what I -- so sorry for interrupting. What I had 18 proposed to do, as far as I recollect, was to discuss 19 those in more detail at the Board meeting but, because 20 I didn't get invited into the Board meeting, I didn't 21 get the opportunity to expand on those suggestions in 22 the Board meeting. 23 Q. Where it says, "Further details will be shared at the 24 meeting", is this another example of not wanting to 25 commit too much to writing or is it something else? 103 1 A. I wanted to flag that there were options that I thought 2 the board should consider and to be able to make that as 3 a verbal statement, rather than have it in writing, from 4 my memory. 5 Q. Were the Board told about the risks that had been 6 identified in that earlier draft? 7 A. I don't know, I wasn't at the Board meeting, so I don't 8 know what was shared in that respect. 9 Q. We'll get to the reasons for that but it had been your 10 intention to attend the Board meeting, had it? 11 A. Yes, it had. 12 Q. It certainly reads, on the right-hand side, as though it 13 was anticipated that many people would have successful 14 and wide claims against the Post Office? 15 A. I think that -- I think that was certainly my view at 16 the time. But that wasn't necessarily based on data; 17 that was based on what I knew we needed them to go ahead 18 and disclose. 19 Q. Although you didn't attend the board meeting, those 20 risks that are identified on the right-hand side, were 21 they things that you shared with the Executive Team? 22 A. I -- my recollection is I shared them with the CEO. 23 Q. Around 12 July or at some other point? 24 A. It would -- would have been around that point. It might 25 have been a bit later than that but -- because we'd 104 1 started working through the Cartwright King sift and 2 looking at the numbers of the disclosures required to be 3 made. 4 Q. The reactive approach that's discussed there and 5 recommended in respect of criminal cases, the net effect 6 of that was likely to be to delay compensation, wasn't 7 it, waiting for people to come to you rather than 8 inviting people? 9 A. So because of the disclosure process that was ongoing, 10 I just thought it was important -- this is my 11 recollection -- I thought it was very important to start 12 that disclosure process and, as we see through the other 13 documents, we then ask for that disclosure process to be 14 validated and further advice came from Mr Altman and, 15 frankly, I think that, after Post Office got through 16 that stage, then there should have been a step back to 17 say, "And what next?" 18 So that might have been my advice on 12 July and 19 I suspect it was advice from Cartwright King, although 20 I don't have that information. I think -- 21 Q. Would you accept that, looking back, that was 22 an opportunity missed in which the Post Office could 23 have taken a proactive approach to approach 24 subpostmasters? 25 A. I think, in hindsight, yes, it was, and I think, in 105 1 hindsight, that was what -- part of what I was trying to 2 do with the Mediation Scheme. 3 Q. Can we please stick with the left side one, so the one 4 on the right-hand side can be removed. This is the 5 final version. Can we scroll over the page, please. 6 There are details here of the Criminal Cases Review. It 7 says: 8 "Post Office have been advised by our external 9 criminal lawyers to undertake a review of all cases 10 going back to the time of the migration from old Horizon 11 to Horizon Online ..." 12 So this is the Sift Review that you were just 13 talking about? 14 A. That's correct, yes. 15 Q. It says: 16 "It is important to note that we believe (precise 17 records from [Royal Mail] are not available) that we 18 will have undertaken circa 55 prosecutions a year for 19 the last 10 years. Our external lawyers have advised us 20 that they believe there will be around 5% where they 21 need to disclose the additional evidence and then it 22 will be up to the defence lawyers to consider the 23 evidence and apply to the Court of Appeal. 24 "Each individual has to seek leave to appeal to the 25 Court of Appeal if they want to seek to overturn 106 1 a conviction. The Court of Appeal will look at each 2 case on its merits and will consider what evidence 3 a person was convicted on: for example, there may be 4 Horizon evidence but also other paper trail evidence or 5 even admissions of guilt. It is by no means certain 6 that each appeal will be successful." 7 Then it says: 8 "We may also face civil suits for wrongful 9 conviction. The consequences of this are: 10 "Malicious Falsehood ... 11 "Defamation ... 12 "Wrongful termination ... 13 "Harassment ... 14 "If we abandon prosecutions we may also face claims 15 for [for example] malicious prosecution." 16 Quite severe consequences, potentially, facing the 17 Board at this stage? 18 A. Yes, I agree. 19 Q. Now, I want you to look at that 1.1 where it says: 20 "Our external lawyers have advised us that they 21 believe there will be around 5% where they need to 22 disclose the additional evidence and then it will be up 23 to the defence lawyers to consider the evidence and 24 apply to the Court of Appeal." 25 On a previous draft that I've taken you to, it 107 1 says -- in fact, very different wording -- that 5 to 2 10 per cent of cases may be overturned. Could we please 3 go back or if it's possible to have side by side 4 POL00191681, and the second page of that, please. Thank 5 you. This is the earlier version that I took you to 6 before, the Hugh Flemington draft, a couple of days 7 letter. If we scroll down on the left side to 3.4.2, in 8 that earlier draft, it says: 9 "It is important to note that we believe precise 10 records from [Royal Mail] are not available) that we 11 will have undertaken circa 55 prosecutions a year. Our 12 external lawyers have advised us that they believe there 13 will be around 5-10% of these which may be successfully 14 overturned and the convictions quashed." 15 Now, you were the author of the final version and 16 submitted that to the Board. Are you able to assist us 17 with how it came about that 5 to 10 per cent which may 18 be successfully overturned became 5 per cent where they 19 need to disclose the additional evidence? 20 A. I can't remember exactly but do we have a date for the 21 first draft because -- 22 Q. We do. 23 A. -- I was getting -- 24 Q. The first draft is -- well, it was sent to you by Hugh 25 Flemington on 10 July 2013. 108 1 A. This would have been done for the Board couple of days 2 later, maybe two or three days later. 3 Q. The final date on the right-hand side is the 12th. 4 A. So I think what I was doing was -- I was in contact with 5 the criminal law firm who were doing the review and 6 I can't remember exactly but it may be that they gave me 7 that revised information in the meantime but I cannot 8 remember but that -- 9 Q. It's a very significant difference, isn't it? 10 A. Yes, it is. 11 Q. 5 to 10 per cent gets changed to 5 per cent -- 12 A. Yes. 13 Q. -- and "successfully overturned" is changed to "they'll 14 need further steps before they might successfully 15 overturn". 16 A. Yes, it is. 17 Q. Did you make that change yourself? 18 A. I think I must have done, yes. 19 Q. Who were the external lawyers that you spoke to in 20 relation to that? 21 A. That would be Cartwright King, I think. 22 Q. Do you think, in some way, it was intentionally watered 23 down? 24 A. No, I don't think so. I think I was just stating the 25 facts, I suppose. 109 1 Q. They're quite different facts, aren't they? 2 A. Well, the 5 per cent is clearly very different but 3 I think also I had a better understanding of what the 4 process would have to be -- I can't remember exactly. 5 I'm only speculating now. 6 Q. Were you concerned that the board would react quite 7 badly to being told that 5 to 10 per cent might be 8 successfully overturned? 9 A. I don't think so because it was a fact. It was, you 10 know -- and I would have been guided by the -- by 11 Cartwright King, who were undertaking the review. 12 Q. Do you remember who in particular you spoke to at 13 Cartwright King? 14 A. No, I can't remember. 15 Q. Who was it likely to have been? 16 A. Maybe Martin Smith. There was somebody I was in 17 correspondence with, which is in the documents where I'm 18 going backwards and forwards about how many have you 19 done, you know, when will you get it done, how is it 20 going on it. 21 Q. Thank you. That can come down, please. Can we please 22 look at the Board minutes of the ultimate Board meeting 23 on 16 July 2013, that's POL00021516. We can see there 24 Alice Perkins, some Non-Executive Directors, including 25 Susannah Storey, who I think was from UKGI, or ShEx at 110 1 that time? 2 A. ShEx. 3 Q. Paula Vennells, Chris Day. You're not in attendance. 4 Why weren't you in attendance at that Board meeting? 5 A. Because I was waiting outside to be called in. 6 Q. Who had asked you to stay outside? 7 A. So the process for the Board meeting was that you waited 8 outside the room at around the time of your slot and 9 then the Company Secretary would come and get you when 10 the Board had reached the point that you should appear 11 on the agenda. 12 Q. Did the Company Secretary come and get you to present on 13 the very paper that we've just been looking at? 14 A. No, she didn't. 15 Q. Do you know why she didn't? 16 A. I'm trying to remember what she said to me at the time. 17 I think she said that they had completed the discussion 18 and that I wasn't required. 19 Q. Can we turn to page 6 of these minutes, please, "Horizon 20 Update", so this is presenting the paper that you had 21 produced: 22 "The CEO explained that although the Second Sight 23 Report had been challenging it had highlighted some 24 positive things as well as improvement opportunities." 25 Just pausing there, would it have been normal for 111 1 the CEO to have presented something like this? 2 A. In general, what would happen, if you had a specialist 3 topic at the Board, you would go and present that paper. 4 So I think -- I mean, she might give a short summary at 5 the beginning but, in general, if it was your paper, you 6 should go and present it. 7 Q. "The Business had been praised in Parliament for setting 8 up the independent review; the proportionality of the 9 tiny number of cases had been emphasised; and no 10 systemic issues had been found with the Horizon computer 11 system. However there were cultural issues which had to 12 be addressed to improve the support we gave to 13 subpostmasters. The CEO stressed that this was now 14 a catalyst to make changes in the Business." 15 It says: 16 "The Board were concerned that the review opened the 17 Business up to claims of wrongful prosecution. The 18 Board asked if Susan Crichton, as General Counsel, was 19 in any way implicated in the prosecutions." 20 Were you aware that there was going to be Board 21 discussion about you in particular? 22 A. No. 23 Q. What is your understanding of this paragraph? 24 A. I'm just reading it again. So my understanding is that 25 the Board were asking the CEO whether I was implicated 112 1 in the prosecutions, in other words bringing the 2 prosecutions against the subpostmasters. 3 Q. "(c) The board expressed strong views that the Business 4 had not managed the Second Sight review well and 5 stressed the need for better management and cost control 6 going forward." 7 Now, where it refers to "The Business", what do you 8 think they had in mind? 9 A. Well, I think it was me but I don't know what was said 10 in the meeting. 11 Q. "The Board accepted that this was an independent review 12 and therefore things could happen that were beyond the 13 control of the Business. 14 "However the things that could be managed by the 15 Business needed to be well managed with strong 16 leadership and the Board asked the CEO if she had 17 considered changing the person leading for the 18 Business." 19 "Considered changing the person leading for the 20 business"; who was that person? 21 A. That was me. 22 Q. "The CEO had considered this and recognised that the 23 Business did not have good governance in place around 24 Second Sight, but that the independence of the review, 25 and the input from MPs and Justice for Subpostmasters 113 1 Alliance had made this complicated." 2 "The Business did not have good governance in place 3 around Second Sight"; what do you understand that to be 4 a reference to? 5 A. So now I understand that to be that I did not control 6 the Second Sight delivery of the report, is what 7 I understand that. I think that's a -- that's what 8 I understand that to mean. 9 Q. We see at the end there: 10 "The Chairman asked for a review, a post-mortem, to 11 report to the ARC ..." 12 Is that Audit and Risk Committee? 13 A. That's correct. 14 Q. "... explaining how we awarded and managed the contract. 15 This should be put in hand swiftly." 16 One final document before we break for lunch. Can 17 we please look at POL00099210. This is the Board 18 agenda, so this is the original agenda. If we scroll 19 down, "11.40 Horizon Update", it looks as though it was 20 going to be you and Mark Davies who were going to speak 21 to that issue; is that the correct interpretation of 22 this agenda? 23 A. It is, yes. 24 Q. Can we please turn to page 105. We see this is the 25 document that we looked at earlier, so this is 114 1 a document that you produced, your significant 2 litigation risks table? 3 If we scroll down, please, to pages 106 and 107 -- 4 106, over the page, please -- we have a list there of 5 principal criminal cases bought by Post Office Limited. 6 Did you prepare this table? 7 A. I think it was prepared by either -- I think it was 8 prepared by Mr Singh. 9 Q. But it has your name at the bottom, you took overall 10 responsibility -- 11 A. Yes, it reported to me, yeah. 12 Q. -- for this paper. We see there reference to: 13 "Two assistant subpostmasters accused of cover 14 shortages by delaying the processing of business 15 deposits to Santander. Case concerned 40 deposit slips 16 being suppressed ..." 17 I think that is a case we've looked at: 18 "Both defendants pleaded guilty, and were sentenced 19 to 5 months and 6 months ... 20 "Subpostmaster accused of theft of ..." 21 Plenty of entries of subpostmasters being accused of 22 theft and various figures; references to defendants 23 pleading guilty; Crown Court trial fixed; the case has 24 been committed to the Crown Court; the defendant pleaded 25 guilty and was sentenced to nine months' imprisonment, 115 1 suspended for 18 months; subpostmaster accused of two 2 offences of theft and two offences of false accounting, 3 that case had been committed to the Crown Court; 4 subpostmaster accused of fraud, defendant pleaded guilty 5 and was sentenced to 16 months' imprisonment. 6 So the same Board, if we scroll down, being made 7 aware, at the same time as issues concerning the Second 8 Sight Report, of subpostmasters continuing to be 9 prosecuted. 10 Continuing: there's a hearing date to be set there; 11 we see POL has recovered so still recovering money; 12 further enquiry undertaken by the Investigation Team. 13 So the Investigation Team was still investigating, the 14 lawyers were still prosecuting and all these matters 15 being brought to the Board's attention on the same day 16 as the report regarding the Second Sight Report. 17 A. That's correct, it was in the same Board pack. 18 Q. Yes. We also have the Board paper that you produced 19 that we looked at, I don't need to take you to it but 20 albeit it doesn't now say 5 to 10 per cent of cases will 21 be successful overturned, it did, at this point, say 22 that the Second Sight Report will need to be disclosed 23 in 5 per cent of cases and there was that final page 24 that I took you to which mentions various civil suits 25 for wrongful convictions, et cetera. That paper went to 116 1 the Board on that occasion as well? 2 A. That's correct. 3 Q. Is it surprising that there isn't more discussion at 4 Board level of the link between the Second Sight Report 5 and all these prosecutions and investigations that were 6 still continuing? 7 A. I find it surprising, certainly with hindsight but, even 8 at the time, I found it surprising. 9 MR BLAKE: Thank you, sir, that might be an appropriate time 10 to break for lunch until 2.00. 11 SIR WYN WILLIAMS: Yes, sorry. Can we go back to the agenda 12 again, please. There is something that is niggling away 13 at me that I want to clear up. 14 MR BLAKE: That is the first page of the previous document 15 so POL00099210, page 1. Perhaps we could zoom out 16 a little bit. 17 SIR WYN WILLIAMS: Right, thank you. 18 Now, let me see if I'm understanding this, 19 Ms Crichton. Item 4, "Horizon Update", to be delivered 20 by you and/or Mr Davies, I suppose. Do you know whether 21 Mr Davies delivered a report? 22 A. I don't think he did. Can you see from the minutes? 23 MR BLAKE: Sir, it may assist if we look at POL00021516, 24 which are the minutes, Mr Davies is not listed as being 25 in attendance. 117 1 SIR WYN WILLIAMS: Right. So neither of you were involved 2 in that. 3 Sorry, we've gone to the minutes now. Can we go 4 back to the agenda, what was intended and then, if you 5 go down to item 9, you were to provide either a paper or 6 a report, I'm not quite sure which, in relation to group 7 structure, yes? 8 A. Yes, that's correct. It's on the agenda. I can't 9 remember whether I went in and did that or not. 10 SIR WYN WILLIAMS: All right. So then item 11, the 11 Significant Litigation Report, which you had taken 12 responsibility for, even if you may not have drafted it, 13 for some reason that was being presented by Alwen Lyons. 14 I know she was Company Secretary. What was the thinking 15 behind that, so far as you were aware? 16 A. So it was a noting paper. So -- 17 SIR WYN WILLIAMS: Right. So there was to be no discussion 18 of it; is that what that means? 19 A. No, it means it is there to be noted by the Board but, 20 if there are any issues that the Board wishes to raise 21 on that, they can raise it and it can either be dealt 22 with via the minutes or an action item. So, for 23 instance, if the Board had said, "Can you give more 24 details about this or that", that would have been in the 25 minutes and would have been a Board action item, which 118 1 would have then come to me to deal with. 2 But -- so it was absolutely -- you could absolutely 3 discuss them but -- so it's things like the company 4 sealings and the Health and Safety Report and the 5 Significant Litigation Report were, I think, from memory 6 always items for noting. 7 SIR WYN WILLIAMS: Right. The document in which you 8 ultimately said that there may need to be further 9 disclosure in 5 per cent of past cases, can you identify 10 for me where that might have come up, in terms of the 11 agenda, in respect of items 1 to 12, so to speak? Where 12 would that have fitted in? 13 A. So that would have been item number 4, the "Horizon 14 Update". 15 SIR WYN WILLIAMS: Right. So that's where either you or 16 Mr Davies would have had the opportunity to speak to the 17 report but it appears that neither of you were asked to 18 do so; have I got that correct? 19 A. That's correct. 20 SIR WYN WILLIAMS: Okay. Sorry to go back over that, but 21 I wanted to be clear how these things work. 22 MR BLAKE: Absolutely, sir. 23 Can I just ask two questions that follow up from 24 that? 25 SIR WYN WILLIAMS: Yes, of course. 119 1 MR BLAKE: If we go back to the board minutes at POL00021516 2 and we look at page 8 of that. We see at the bottom 3 there "Group Structure", and that was one of the items 4 that you, it seems, were due to address and there isn't 5 reference to you there. It has an action point for the 6 CFO and, if we scroll down the page, "Action: CFO", 7 "Action: Company Secretary", are we right in 8 understanding that, despite that matter not being about 9 Horizon, you still hadn't been invited into the room? 10 A. I think that's what I remember happening, yes. 11 Q. Thank you. 12 SIR WYN WILLIAMS: So we'd better make it 2.05 now, 13 Mr Blake. 14 MR BLAKE: Yes, let's go for 2.05. It might be that we run 15 into tomorrow morning with Ms Crichton. She is aware of 16 the possibility of that. 17 SIR WYN WILLIAMS: Yes, I understand that, you know, it's 18 difficult to be precise about the length of time of 19 questioning, as this Inquiry has proved on occasions 20 and, as inconvenient as it may be on occasions for 21 witnesses, I'm afraid these things do happen. 22 MR BLAKE: Thank you very much, sir. 23 SIR WYN WILLIAMS: 2.05. 24 (1.06 pm) 25 (The Short Adjournment) 120 1 (2.04 pm) 2 MR BLAKE: Good afternoon, sir, can you see and hear me? 3 SIR WYN WILLIAMS: Yes, I can thank you. 4 MR BLAKE: Thank you very much, sir. 5 The first document we're going to look at this 6 afternoon is POL00118496, please. This is a note, 7 a file note, from Paula Vennells, dated 26 July 2013 and 8 it relates to a conversation that she had with you on 9 24 July. I'm going to spend a bit of time on this 10 document and I'll take you through some of the key 11 paragraphs in this file note. She says: 12 "Purpose: to make clear to Susan that she is 13 accountable for the process going forwards and that 14 there are three areas of concern that I have going away 15 on leave. And also, in order to protect the business as 16 much as possible, to reassure her that I believe she can 17 do this, in order to give her the confidence to do so 18 and to avoid any misunderstanding or possible 19 demotivation in the process." 20 What was your understanding of the purpose of the 21 meeting? 22 A. I can't remember, it might have been our first 23 one-to-one after the issue of the report but I'm not 24 sure. 25 Q. We've seen the Board minutes and concerns raised at 121 1 Board level. Was this the first opportunity to discuss 2 what happened at the Board with Paula Vennells? 3 A. That would be my recollection, yes. 4 Q. What do you understand by "protecting the business"; was 5 that something that she brought up with you? 6 A. Yes, she did. I think she felt that -- I think what 7 I understood her to say was that she felt that the 8 Second Sight Report could have been very damaging for 9 the business. 10 Q. She says: 11 "I asked Susan how she felt the meeting with 12 Alasdair Marnoch (Chair of [the Audit and Risk 13 Committee]) had gone. She thought he had understood and 14 was supportive of the process. I confirmed that was the 15 case and that he was particularly reassured that we had 16 the legal and independence aspects covered. 17 "I also said that I had now had 2/3 conversations 18 with the Chairman, who although she was still very 19 concerned about the whole issue, was more reassured that 20 we were taking the right approach, which included Susan 21 seeing this through. I suggested that Susan should see 22 Alice -- Susan informed me that she had already secured 23 a date next Thursday 31/7." 24 Can you assist us with what the purpose of the 25 meeting with Alisdair Marnoch was? 122 1 A. He had been tasked, or he might have been volunteered, 2 I don't know -- he was the Chair of the Audit and Risk 3 Committee -- to come and meet with Alwen and I, so that 4 we could take him through the process that we were going 5 through, or I could take him through the process we were 6 going through, as I hadn't had an opportunity to do that 7 the Board meeting. Can I just add that I hadn't seen 8 the minutes of the meeting either, so I didn't 9 understand what had been said at the meeting. I was 10 also keen to understand that, in case there were some 11 issues arising from that that I needed to know about. 12 Q. So you hadn't been invited into the meeting and you 13 hadn't seen the minutes of the meeting and we're now 14 26 July; was that a surprise to you? 15 A. Yes. 16 Q. It says Alice Perkins was very concerned; were you aware 17 that she was very concerned and, if so, what were you 18 aware of? 19 A. I think I knew she was concerned but I didn't 20 particularly know why because I felt that I delivered on 21 what she'd asked me to do, at least, you know, we'd got 22 to the Interim Report stage. So I didn't really 23 understand why and I did think I had to meet her and 24 talk to her, and I was very concerned that, you know, 25 following standing outside the Board meeting for 123 1 an hour, you know, where on earth do you go from here? 2 Q. The note says: 3 "I outlined three concerns that I would want Susan 4 to be clear about and have actions in place to deal with 5 ..." 6 The first is costs; the second is delivery of work 7 in progress. It says: 8 "Susan felt and that via Angela and her close 9 working with [Second Sight], we should be able to manage 10 the above two points. Her concern centred on [the 11 Justice for Subpostmasters Alliance] and keeping them to 12 any approach agreed. My observation to her was that 13 Alan Bates would be subject to the same pressures as 14 George Thomson: [Alan Bates/George Thomson] agree 15 a sensible way forward but when they go back to their 16 members, they are accused of 'going native' and then 17 sent back with different and usually more extreme 18 requests. The only way around this is to stay very 19 close to [Alan Bates], to be in touch once or twice 20 a week, to check that he has the support [he] needs, and 21 to listen out for any concerns that may be building." 22 Can you assist us with that paragraph there and what 23 was being suggested there? 24 A. So I would say that the Post Office developed a very 25 close relationship with George Thomson who was the 124 1 (unclear) of the National Federation of SubPostmasters 2 and she was suggesting that I should develop the same 3 kind of relationship with Alan Bates, which I didn't 4 have any issue with developing that relationship but 5 I felt it had to have a purpose. 6 Q. If we scroll down the page, another one of the 7 objectives, it relates to the JFSA, and then it says as 8 follows: 9 "Susan was initially frosty in her manner. She is 10 clearly feeling the pressure, which is understandable. 11 I hope that I reassured her, and within a few minutes we 12 were talking normally, she relaxed and we had a useful 13 conversation as noted above". 14 Is that an accurate description of you on that 15 occasion? 16 A. I certainly -- I think I would have been frosty, yes, 17 given the Board meeting issue and I think I was 18 concerned about my position vis à vis the Board, 19 probably I would have been talking normally because 20 I don't -- that would be my normal way I'd behave. 21 Q. She says: 22 "I remain concerned [that] Susan is not organised or 23 structured nor is she a leader. These gaps in her 24 capability are risks to the business. They are being 25 dealt with by supporting her with individuals who are 125 1 organised and structured, and by a process to monitor. 2 She remains a good adviser. I will review the longer 3 term decision in September." 4 Does that accord with your recollection of the 5 discussions with Paula Vennells on this occasion? 6 A. She didn't mention those things to me. 7 Q. No, and what is your feeling about what's said there? 8 A. I suppose I would disagree with those and I think my 9 career demonstrates that that's not the case. 10 Q. Were you aware that your future was going to be 11 determined in September or reviewed in September? 12 A. Not at that time, although, when I reflect on it, it's 13 not entirely unsurprising. 14 Q. We know that you received the Clarke advice relating to 15 Gareth Jenkins on 17 July. We're now on 26 July. There 16 doesn't seem to be a mention in this email of concerns 17 about historic and even ongoing criminal cases. Why is 18 that? 19 A. I think because that was the role that Alisdair Marnoch 20 was taking, so part of our discussions was to go through 21 the review process that Cartwright King -- and to 22 explain why we were doing it and what we were doing. At 23 least, that's what I remember us doing. We spent quite 24 a bit of time on that. 25 Q. So was it not your responsibility to draw that advice to 126 1 Paula Vennells's attention? 2 A. I think I had flagged it to her. I just can't quite 3 remember when. 4 Q. Would it be around that time? 5 A. I would have thought so. I think, yeah. It would have 6 been part of the discussion around the Cartwright King 7 review and why they're doing it and what they had to 8 disclose and why they had to disclose it. 9 Q. Is it surprising, though, that on 26 July that you had 10 a meeting with the CEO and no concerns were raised in 11 that meeting about the safety of convictions, for 12 example? 13 A. I think I had done that with Alisdair Marnoch, so she 14 would have had that -- and he did a note. I think it is 15 surprising, yes, in retrospective. 16 Q. So it's surprising but you thought that it was being 17 taken forward by Alisdair Marnoch? 18 A. Yeah, and if you go back to my recommendation in the 19 Board paper, I think that asked for the ARC to review 20 the prosecution's policy, I think -- it was in one of 21 the drafts, anyway -- in September, as part of the ARC 22 meeting. 23 Q. Do you think that that lacked some urgency, given the 24 advice from Simon Clarke? 25 A. Probably, yes. But we were then doing the -- we were 127 1 then doing the disclosure and also I had asked that 2 prosecutions be ceased but I hadn't officially -- 3 I hadn't -- I'd asked that they would be reviewed as per 4 the post-separation issues. 5 Q. But they were continuing? 6 A. As far as I was aware, yes. 7 Q. Can we look at POL00006590, please. This is a document 8 of 26 July 2013 and it's entitled "Update on the work 9 programme arising from the Horizon report". So that was 10 produced, I think, on the same day as your meeting with 11 Paula Vennells -- sorry, the same day as the email note 12 from Paula Vennells, two days after your meeting. Do 13 you know who drafted this document? 14 A. I don't know who drafted it. 15 Q. We'll see somewhere there's an email chain where it's 16 sent by Paula Vennells. Would it have surprise you if 17 Paula Vennells herself drafted this? 18 A. No, it wouldn't surprise me, no. 19 Q. On page 1, you hadn't been asked to provide or produce 20 a document like this? 21 A. I don't think so. 22 Q. Because we saw in the Board minutes that there was 23 a request for an update on the work? 24 A. Yes. 25 Q. But that was, as we've heard, a meeting that you weren't 128 1 in attendance? 2 A. No. 3 Q. Page 1: 4 "Further to the Board discussion on 16 July, this 5 note provides an update on how we're taking forward the 6 programme of work in response to the publication of the 7 Second Sight Report." 8 Now, given that you had actually produced the note 9 for the Board for 16 July and were due to speak to that, 10 is it surprising or were you surprised that an update 11 was being provided by somebody other than you? 12 A. I am surprised but I can't remember writing this or it's 13 not the way, it's not my typeface, but I -- yeah. 14 Sorry, yes, I don't think I did it and it is surprising 15 to me, but I can't remember. 16 Q. If we scroll down the page, point 4: 17 "We have ... been focusing on developing an approach 18 to respond to these expectations which balances the 19 requirements to be cost effective, time efficient and 20 credible ... two specific concerns about Second Sight 21 ... 22 "[First] as a two-man attempt they do not have to 23 the capacity to deal with all these cases within 24 an acceptable timescale; and 25 "[Secondly] their approach of seeking to reconcile 129 1 the conflicting evidence and views of the Post Office 2 and subpostmasters -- which stems from a steer from 3 James Arbuthnot that they needed to 'keep the JFSA 4 onside' -- is pushing them into an almost impossible 5 situation, which both extends the time taken to conclude 6 each case and, more worryingly, creates a tendency for 7 them to place greater weight on the subpostmaster's 8 version of events, irrespective of the evidence we 9 present." 10 Was that a view that you were aware of? 11 A. No, I don't think I was. I can't remember being aware 12 of that view ... I don't remember that there was the 13 concept that it was irreconcilable. I thought it was 14 a question of them stating their case. 15 Q. Were you aware of a concern in the business at this time 16 that Second Sight were tending to place greater weight 17 on the subpostmasters' version of events? 18 A. Possibly within the business but it wasn't a concern 19 that I shared, I don't think. 20 Q. "We propose to address these concerns through two 21 specific measures: 22 "[The first] restricting Second Sight's remit to the 23 specific task of preparing an impartial evidence base 24 ..." 25 Then over the page: 130 1 "changing the way we work with Second Sight, by 2 allocating additional senior level resource with a deep 3 understanding of the network to work closely alongside 4 them, in order to answer their queries and help them 5 prepare an accurate evidence base as quickly and 6 efficiently as possible." 7 If we move on, please, to 26 July, can we look at 8 POL00297994. It's around this time there's an email 9 discussion about the Board's own potential liabilities, 10 raised at a 23 July Board meeting. This is an email to 11 you from the Head of Corporate Finance and he provides 12 a suggested response to a question raised at the 23 July 13 Board meeting: 14 "The Board requested further clarification on their 15 position as directors; in summary it is highly unlikely 16 that any individual director would have any personal 17 liability in connection with this review, unless they 18 had acted in bad either or maliciously. In the unlikely 19 event that an action is brought (could only be by Post 20 Office Limited or in very rare circumstances by the 21 shareholder acting on behalf of the company) there is 22 insurance cover in place to cover directors", et cetera. 23 Were you aware of a concern at Board level about 24 their own personal liability? 25 A. I think that had been fed back to me as one of the 131 1 questions raised by the Board to be covered off in this 2 paper, which is why I talked to Charles Colquhoun about 3 it or asked him for his view on the policy. 4 Q. Was your impression of the Board or the executive at 5 this time one of concern about their own personal 6 liability? 7 A. I think possibly at the Board level because that was the 8 feed -- that was what was fed back to me from the Board 9 meeting. 10 Q. Does anything stick out in your memory in that respect? 11 A. No, I don't think so. 12 Q. You then have a meeting with Susan Crichton (sic). Can 13 we please look at POL00381455, please -- sorry, with 14 Alice Perkins, "AP meeting with Susan Crichton -- 15 31 July at 148 Old Street". 16 Again, this is another note that I think I'm going 17 to have to take you to in quite a lot of detail. She 18 begins the note saying: 19 "I opened by saying that I had wanted the meeting 20 because I felt uncomfortable about the fact that [Susan 21 Crichton] and I had not had a conversation since the 22 [Second Sight] Interim Report had been published a few 23 weeks ago. I had not wanted to go on my holiday without 24 talking to her. 25 "I first asked about her health as the last time 132 1 I had seen her on her own before the June Board awayday, 2 she had been unwell." 3 Are we to read anything into that? Were you feeling 4 unwell as a result of your work or was it entirely 5 unconnected? 6 A. I think where I come out to it on reflection was it was 7 actually making me quite ill. 8 Q. It says that you were very cool in your manner at the 9 outset. You had number of questions which you wanted to 10 ask. You started to write down what she was saying in 11 your notebook and she remarked that it seemed as though 12 it was turning into something very formal, which was not 13 what she had in mind. She wanted to talk to you about 14 how you were and how you felt about things. 15 Is that an accurate reflection of what occurred at 16 the beginning of that meeting? 17 A. I can't recall that but it could have been. 18 Q. It then goes on to say: 19 "She said she had been very unhappy about being kept 20 outside the Board meeting for an hour and then told her 21 presence was not required. She said she was not 22 prepared to be treated as a 'scapegoat'." 23 Why were you concerned about being treated as 24 a scapegoat? 25 A. So I felt at the time as if I had delivered on what 133 1 she'd requested, albeit by the Interim Report, that 2 I hadn't been allowed to go and explain to the board my 3 position and kept outside and I didn't have another 4 channel to talk to the Board, and you'll see later that 5 I think I make clear that, as a General Counsel, you 6 can't operate in a business if you don't have the 7 support of the Chair, the Board and the CEO. 8 Q. How were they going to treat you as a scapegoat? 9 A. So my view was that, within the Board context, 10 I suspected, because I didn't know, that the Chair had 11 not been clear and that it was her instructions that we 12 instituted the Second Sight review on the basis that we 13 did, as in an independent review and, if it was 14 an independent review, then that's what it had to be: 15 an independent review. 16 Q. It says: 17 "I said that I hoped she knew me and the Board well 18 enough to know that we were not interested in finding 19 scapegoats. That was not my approach and no one had in 20 mind to make her into one. I apologised for the fact 21 that she must have felt uncomfortable outside the 22 Boardroom and explained that after [Paula Vennells] had, 23 at my request introduced the agenda item on [Second 24 Sight] privately, the discussion had developed quickly 25 and it had not been appropriate at any point to bring 134 1 her in." 2 So the suggestion seems to be that she had requested 3 the CEO to introduce the item and that it went quickly 4 and it hadn't been appropriate to been you in. What was 5 your reaction to being told that? 6 A. I said that I thought that was not appropriate. You 7 know, I said that if you -- it was a significant piece 8 of -- should be a significant -- I think what I said, 9 something along the lines of it was a significant issue 10 for the Board and there should have been a full 11 discussion and I should have been there to explain how 12 I -- my views on the issues in front of the Board. 13 Q. "The agenda had been really packed, partly because we 14 had to add this piece of business, and I had decided 15 that once the Board's private discussion was over, there 16 was no time to pursue the conversation further with 17 [you]." 18 Did you believe that? 19 A. Well, it's what she said at the time but, no, I didn't 20 necessarily believe it because I knew what was on the 21 agenda. 22 Q. We also saw that you had been due to talk about another 23 item on the agenda? 24 A. Later in the -- yes, on the corporate restructure. 25 Q. Your recollection, am I right in saying, you don't 135 1 believe that you at any point entered the room? 2 A. No, it would have been very difficult for me to go in 3 and talk about the corporate restructure after not 4 coming in to talk about the Second Sight Report. 5 Q. "I had realised that that would be difficult for her. 6 She said that she needed to know that she that the full 7 confidence of the Board. No one told her what had been 8 said at the Board, though she understood that there had 9 been some difficult questions, especially from VH." 10 Is that Virginia Holmes? 11 A. Yes. 12 Q. She was a Non-Executive Director? 13 A. Yes. 14 Q. Why do you think there were some difficult questions 15 from Virginia Holmes? 16 A. I think Alwen probably told me that but didn't really 17 give me any detail. 18 Q. So you did have a line into the Board from Alwen 19 Lyons -- 20 A. Yes. 21 Q. -- in terms of feeling back what had happened? 22 A. Well, only at a very high level. 23 Q. What had Alwen said about Virginia Holmes? 24 A. I can't remember now, I'm sorry. 25 Q. Did you get on with Ms Holmes? 136 1 A. It was a professional relationship. 2 Q. Do you have any concerns about her? 3 A. I didn't really know her that well, she hadn't been on 4 the Board for that long, I don't think. 5 Q. It says that your reputation was at stake. Were you 6 concerned about your reputation? 7 A. I felt that it was important, as an in-house lawyer, 8 that you were able to behave in a way that had integrity 9 and, having been tasked with delivering an independent 10 report, then that's what you should do. 11 Q. It says: 12 "I said that the [Second Sight] Interim Report and 13 the timing of its publication had been potentially very 14 serious indeed for the [Post Office] in terms of our 15 national reputation and the effect it could have on our 16 funding negotiations with Government. In the event, it 17 had not come out so badly partly because of the way the 18 Minister had handled her statement in the House of 19 Commons. But it had been very worrying at the time." 20 Can you assist us with that paragraph please? 21 A. So I think, as part of the James Arbuthnot discussion, 22 he'd asked Jo Swinson, I think, who was the Minister at 23 the time, to go before the House of Commons, and he'd 24 asked her a Parliamentary question that she'd had to 25 answer, from memory. 137 1 Q. Yes. In terms of funding negotiations with the 2 Government, what were the concerns there? 3 A. I can't remember where we were in the funding cycle but 4 Post Office relied for funding on the Government and it 5 may be, I'm not completely clear on this, that we had 6 a one-year -- we maybe had a one or two-year funding 7 agreement as part of the separation from Royal Mail 8 Group but I really can't remember. It would seem 9 strange that we'd become independent with only 10 a two-year funding arrangement but I can't remember, I'm 11 afraid. 12 Q. It then says: 13 "The Board had been unsighted on the issue. They 14 had naturally been alarmed when they had found out what 15 had happened and the fact that the Board paper had been 16 so bland had not help to build their confidence in the 17 handling of the affair. (There had been the possibility 18 of a discussion on a Board call the previous week but 19 because we had needed to discuss issues in relation to 20 the strategy and funding negotiations with the 21 Government which required Board decisions, these had had 22 to come first and we had run out of time for the [Second 23 Sight] issue before people had to leave the call). 24 "In the course of what followed, the following 25 points were made: 138 1 "[You] said that you thought that it had been right 2 to have the enquiry, as it had revealed the imbalance of 3 power between the [Post Office] and subpostmasters which 4 needs addressing. This was a huge and complex issue for 5 the business." 6 Can you assist us with the words there and what it 7 was that you said. 8 A. I think, as part of the work that Second Sight did, it 9 really brought it home to me -- and I'd already had 10 a discussion with the team as part of our review of the 11 Post Office contract some time previous to this -- that 12 we needed to look at the contract to redress the 13 balance. I likened it, because of my background, to 14 a consumer contract with a large corporate, and that was 15 borne out by certainly the feedback I'd got from Second 16 Sight. But this was a fundamental issue for the 17 business that they needed to address. 18 Q. The note continues: 19 "I commented that I thought that, although the 20 outcome had in some ways been good for [the Post 21 Office], the way the process had been handled had been 22 deeply flawed. I had backed [your] judgement on the 23 appointment of [Second Sight] because we did not want to 24 appoint one of the big four, [you] seemed very confident 25 in them and given her strongly stated opinion to having 139 1 an enquiry in the first place, I had wanted [you] to 2 feel some ownership of the process once we had decided 3 to go down that route. We had lost control of the 4 process; I had lost confidence in Simon Baker early on 5 but had been told repeatedly that he was good and 6 capable of handling the role. I said that we should 7 never have got into a position where we did not see the 8 draft of [Second Sight's] report until days before its 9 publication ..." 10 Pausing there, it very much seems as though you're 11 being blamed in that paragraph. 12 A. I feels like it, yes, and I think, with regard to Second 13 Sight, I hope I've made it clear that, although I knew 14 Ron Warmington, you know, we were not friends and I very 15 deliberately, I think, stepped out of the selection 16 process and allowed them to talk to Alice Perkins and 17 Paula Vennells themselves because it was key to me that 18 both parties accepted what they were getting into at 19 that point, as in a proper independent investigation. 20 Q. Was it your strongly stated opinion that there should be 21 an inquiry written in the first place? 22 A. Yes, it was. 23 Q. Were you sole voice in that? 24 A. It felt a bit like it at times, yes. 25 Q. It continues: 140 1 "I understood that [Second Sight's] investigation 2 had to be independent but in the Civil Service there 3 would have been someone marking it who was close to all 4 the key people [Second Sight, James Arbuthnot, JFSA] and 5 knew what was going on between them. By the time 6 I found out how [Second Sight] had, in effect, changed 7 the [terms of reference] to which they were working, it 8 was too late to retrieve the situation. The 9 organisation and people in it should have had proper 10 time to consider Second Sight's findings and respond to 11 them." 12 It says that you questioned her understanding of the 13 endgame and that the Post Office had seen the report 14 earlier: 15 "[You] had been contacted by the CEO while unwell 16 about this and had come back early from [your] holiday 17 to handle it which had not been ideal." 18 Can you assist us with the reference to "the civil 19 service there would have been someone marking it who was 20 close to all the key people"? 21 A. I don't remember this part of the conversation 22 specifically but I assumed what she was talking about 23 was that, in the Civil Service, of which I had no 24 experience, there would have been a level of control 25 over the report that I hadn't exercised. 141 1 Q. Is it a suggestion that, although it would have been 2 an independent report, there would have been some 3 influence by those who were being investigated? 4 A. Yes, I think that's probably right. That's what 5 I understand this sentence or these paragraphs to say. 6 Q. Is that how you understood the conversation at the time? 7 A. I think so, yes. I think it was. 8 Q. It says that: 9 "[You] said that as a lawyer it was inappropriate 10 for [you] to influence the key stakeholders. [You] 11 would have been criticised had [you] close to them 12 [Ms Perkins] commented that if [you] had felt unable to 13 play that role, [you] should have flagged it up and 14 someone else could have been brought in to perform it 15 (privately I am astonished at this view which I simply 16 do not recognise from my experience elsewhere)." 17 Did you and do you consider that it would be 18 inappropriate to influence the key stakeholders? 19 A. I think the role I was trying to play for Post Office 20 was to be an independent intermediary, so that Second 21 Sight got the information in the form that they wanted 22 it. I wasn't always successful and, certainly, 23 timing-wise things took too long to do. But that's what 24 I believed my role was in this context. 25 Q. Analysing that paragraph, what do you recall of the 142 1 conversation with Ms Perkins? 2 A. I just -- it was very frosty. I suppose I characterised 3 it as being a very difficult conversation. 4 Q. It says that: 5 "[You] said that [you] were in a ... difficult 6 position now. [You] needed the Board's full confidence 7 because so many aspects of what [you] were being asked 8 to do were beyond [your] control. [She] said that [she] 9 realised that she could not control everything, but this 10 was not like an unexpected meter [sic] exploding out of 11 nowhere." 12 Do you know what that that meant? 13 A. I think it might be "mortar". 14 Q. "We needed to identify the worst things which could 15 happen, face them, and work out how we would mitigate 16 them. We needed to stay close to the key players and 17 ensure that we were building their trust and we knew 18 what was going on between them. That would take time. 19 But I did not accept the degree to which [you] had 20 claimed that they were beyond [your] control -- they 21 needed managing. 22 "I asked about [Second Sight's] role going forward 23 and said I thought it was critical that we capped off 24 their involvement at the 47 cases already in the frame. 25 We could not allow them to become involved in any 143 1 additional cases as we would then find it much harder to 2 bring their involvement to an end. [You] said that 3 would be very difficult as [James Arbuthnot] and 4 [Justice for Subpostmasters Alliance] rated them. [She] 5 pointed out that the Post Office did not. It was up to 6 us to propose very quickly alternative arrangements 7 going forward which would command the respect of [James 8 Arbuthnot] and the [Justice for Subpostmasters 9 Alliance]." 10 We then talked about cost, and the need to appoint 11 any 'independent' figures carefully and rigorously ..." 12 If we go over the page, please, I think there's 13 a paragraph there where I think you were critical of 14 Simon Baker, that he hadn't been of the right calibre. 15 A. I thought Simon Baker did a really good job as a project 16 manager, in retrospect, I don't think I would have said 17 that. I think he was, you know, relatively senior in 18 Lesley Sewell's world and he could sort of make up for 19 my lack of technical expertise in knowing what to ask 20 for and getting stuff done and I think that Second Sight 21 appreciated that and thought he'd done a pretty good 22 job. 23 Q. "The problem was that there were too many well paid 24 people in the business not performing as they should be. 25 I said I had thought this issue was being tackled 144 1 through more rigorous performance management, to which 2 her reply was that she was referring to people below the 3 [senior leadership team]." 4 Can you assist us with who you were referring to if 5 that was an accurate description of what you were 6 saying? 7 A. I don't think it was an accurate description. No, 8 I don't think I -- I don't think I would have said that 9 and I certainly can't specifically remember saying it. 10 Q. It says: 11 "By the end of the conversation, [your] tone was 12 less formal and cool but [her] confidence in [your] 13 judgement on key issues and in particular [your] 14 'fatalism' or reluctance to see the importance of 15 managing events and people rather than standing back and 16 letting them happen, were very troubling though I did 17 not say this in terms. 18 "I deliberately did not say anything about the 19 Board's or my confidence in her and after the beginning 20 of the conversation, she did not raise the point again. 21 I did not explicitly raise the issue of the way [Second 22 Sight's] costs had been allowed to spiral out of control 23 because I did not want the conversation to become the 24 'post-mortem', and there were already enough issues on 25 the table between us. 145 1 "PS At one point, [you] referred to a recent 2 conversation with the BIS team which one of them had 3 commented that they had always felt uncomfortable about 4 the Horizon cases. When [you] had asked why they hadn't 5 pursued that, the person had said it was because the 6 [Post Office] had always been so forceful in its defence 7 of the issue and its handling." 8 Are you able to assist us with that conversation 9 with the BIS team? 10 A. I'm really sorry, I can't remember it. I worked closely 11 with the BIS team throughout the state aid and the 12 separation. I didn't have much contact after that so 13 whether it was during that period, I don't know, and 14 I can't remember who said that to me. 15 Q. Who were the BIS team? 16 A. On the state aid it was Will Gibson and there was 17 somebody else who helped him, so they would have been my 18 main points of contact. I'm afraid I can't remember his 19 colleague's name. 20 Q. I'm just going to take you back to your witness 21 statement, on the topic of this entire meeting, and the 22 meeting I've just shown you before with Paula Vennells. 23 Could we look WITN00220100. It's page 86. Thank you, 24 page 86. 25 There are some parts in your witness statement where 146 1 you've addressed comments that have been made by Paula 2 Vennells. If we scroll down, you say at paragraph 239: 3 "As to Ms Vennells' comments in her email to 4 Ms Perkins on 26 July 2013, I was not aware at the time 5 of Ms Vennells' criticisms of me." 6 The next paragraph: 7 "As to whether I consider these criticisms to be 8 fair, they were never communicated to me and I do not 9 consider them to be fair. I have held a number of 10 senior roles during my career and these are not 11 criticisms I have ever faced." 12 If we scroll down to 246 and 247: 13 "Regarding whether I was aware at the time of 14 Ms Vennells' and Ms Perkins' criticisms ... I was not 15 aware of them. 16 "In respect of whether I considered these criticisms 17 to be fair, I refer to my explanation above. I was not 18 aware of these criticisms at the time. They were not 19 criticisms I had faced from colleagues before or since." 20 We've just seen two filenotes, one from Paula 21 Vennells, one from Alice Perkins, detailing meetings you 22 had with them at which they seemed to have been quite 23 blunt about certain criticisms of the way that you 24 approached things. 25 Do you think, looking back at your witness statement 147 1 here, that's accurate? 2 A. So I obviously hadn't seen those notes before I wrote 3 this and I suppose because they were talking about my 4 lack of ability and organisation and as a leader, 5 I wouldn't say that those two notes really addressed 6 that. I would say that they -- well, maybe 7 organisation, I don't know, but that's not how I would 8 necessarily characterise those notes. Now that I -- you 9 know, as I say, I didn't see them when I'd written the 10 witness statement. 11 Q. What your statement doesn't seem to do, though, is to 12 give any idea of the strength of feeling that appears to 13 have been present in the summer of 2013 between you and 14 the senior leadership of the Post Office. 15 A. So I think in relation to the Chair, I make some 16 reference to the relationship there and said it was cool 17 or -- I can't remember exactly -- when I had a meeting 18 with her and it was frosty because I didn't necessarily 19 remember all of the detail of that, I certainly 20 remembered that I put to her the point about 21 independence. 22 Q. The relationship was pretty bad by that stage, it seems? 23 A. I think that's probably a fair summation of it, yes. 24 But, again, I had frankly not forgotten it but probably 25 moved on from it. 148 1 Q. Can we please look at POL00116114. This is the same day 2 as that meeting. It's an email from Alice Perkins to 3 a number of different recipients. She is thanking Alwen 4 Lyons for the note. If we scroll down to page 2, we can 5 see Alwen Lyons has sent an email saying: 6 "Dear All [the bottom email there] 7 "Please find attached a detailed note from Paula 8 providing an update on our programme of work in response 9 to the Horizon investigation." 10 Do you recall I referred to that note and we weren't 11 sure who had drafted it? 12 A. Is that the note that was -- 13 Q. I believe that is. 14 A. Right. 15 Q. Would that surprise you? 16 A. No, no, it wouldn't. I was just, you know -- 17 Q. If we scroll up, please, page 1. Ms Perkins is 18 referring to the way forward, Board note on Horizon. 19 She says: 20 "First, while it is clear that we are committed to 21 using [Second Sight] for the 47 cases which are already 22 in the frame for this review, it is extremely important 23 that we cap their involvement at that." 24 So that was something that was communicated to you 25 to in the same day. Second: 149 1 "We need to ... cap [Second Sight's] costs." 2 Then further down it says: 3 "Finally, I've asked Susan to keep the Board fully 4 informed of future developments and to alert me to 5 anything which she is unable to resolve which could get 6 in the way of getting the job done in the way it needs 7 to be done. She will be seeking conversations about all 8 this with all the [Non-Executive Directors] on 9 an individual basis and will be in touch with you to 10 arrange these." 11 Why were you speaking or needing to speak to the 12 Non-Executive Directors at this stage? 13 A. I presume she said that, on the basis that I'd asked her 14 if I had the confidence of the Board, and so it was sort 15 of "Well, talk to them and find out", was the sort of 16 impression I got. 17 Q. Did you talk to them and find out? 18 A. From memory, well, I'd certainly spoken to Alisdair 19 Marnoch, I can't remember about the others. 20 Q. What impression did they give you about your future in 21 the company? 22 A. I just can't remember. I think I was sort of on the way 23 to making my own decision, to be frank. 24 Q. Can we please have look at POL00145793. We're now on 25 1 August, so the next day, if we could start on the 150 1 second page, please. There's an email from yourself to 2 Paula Vennells. If we scroll down, that's the email. 3 You're providing some updates on the Horizon project. 4 If we scroll down to Second Sight, you seem there to be 5 putting into practice what Alice Perkins had asked 6 regarding the 43, minimising Second Sight's involvement, 7 limiting costs, bringing in another company, 8 potentially, replacing Second Sight, "will have to be 9 carefully managed, we plan on having a face-to-face 10 meeting with Second Sight next week to discuss and agree 11 a way forward". 12 So it seems as though, by that stage, you're getting 13 quite clear directions on the future of Second Sight 14 from -- 15 A. Yes, that's right. 16 Q. -- the Chair? 17 A. Correct. 18 Q. You're putting them into action and emailing the CEO? 19 A. I think, from memory, we'd had a conversation about how 20 to -- I had a conversation with the Second Sight about 21 how to move forward from here, or from, you know, the 22 day before, and how to work through the cases they've 23 got, but we were also thinking about putting in place 24 the Mediation Scheme, which eventually went into place 25 and they remained a key part of that Mediation Scheme. 151 1 Q. Can we please turn to POL00108058. This is the next 2 day, an email from Paula Vennells to Alice Perkins. If 3 we scroll down to the bottom, please. Actually, if we 4 scroll down over the page Alice Perkins sends Theresa 5 Iles a message, saying: 6 "Here is the document to which I was referring. 7 I should be grateful if you could make sure Paula sees 8 it on her return (but no need for her to see it during 9 her holiday). 10 "Please could you make sure no one else sees it?" 11 If we scroll up, its her meeting note. 12 A. Okay. 13 Q. If we scroll down, sorry, we can see the attachment at 14 the bottom and it's "AP meeting with Susan 15 Crichton.docx". 16 The response from Paula Vennells is on the bottom of 17 page 1, please, it says: 18 "Hi Alice. 19 "Teresa confirmed it is on file. 20 "Thank you for doing the meeting and the note. It 21 makes me sad but doesn't surprise me. 22 "There are two alerts from me -- the first is your 23 point about the bland Board paper: I have just seen 24 a bland update from Susan on this week's work, which 25 I have immediately sent on to Chris, with some concerns 152 1 about lack of progress (some issues -- [Second Sight's] 2 costs and working party process -- remaining the same as 3 when I left last Wednesday/Thursday) and no risks 4 flagged at all. For example, there is no colour on the 5 fact that our external lawyers have issued disclosures 6 on 9 cases, up from 2 weeks ago. 7 "The second alert is how much Susan sees as 'beyond 8 her control'. One for my full return. 9 "I will keep close to this and to Chris, who also 10 was briefed to deal with the [Second Sight] costs 11 issue." 12 So reference there to the bland Board paper. We've 13 seen over the course of today, Board papers being 14 changed, words being changed, "bugs" being changed to 15 other words, the 5 per cent issue, for example, going 16 from 5 to 10 per cent of cases that are going to 17 overturned, to 5 per cent of cases where disclosure 18 needed to be made. Do you think that you were producing 19 bland Board papers that didn't accurately set out the 20 risks? 21 A. I don't think so and, certainly as I mentioned, my 22 intention would have been to have a better discussion 23 about the risks face to face because, at that stage, we 24 weren't sure what the risks were. There were a sort of 25 range of potential risks and outcomes from the actions 153 1 we were having to take and I would have preferred to 2 discuss that range, rather than just have it set out in 3 a Board paper. 4 Q. I mean, we've talked about, for example, the Simon 5 Clarke advice on Gareth Jenkins, we're now in August 6 2013. Don't you think you should have been jumping up 7 and down a bit more about serious risks to the business, 8 serious risks to the safety of convictions? 9 A. With hindsight, probably. Yes, probably. I should have 10 been. 11 Q. Paula Vennells says to Alice Perkins: 12 "It makes me sad but doesn't surprise me." 13 What's your view as to whether that was a genuine 14 feeling or not? 15 A. I have no idea. 16 Q. I'm going to take you to notes of some more meetings 17 but, first, I just want to look at some events that 18 occurred around the same time. Can we begin with 19 POL00142323, please. We're going back slightly in time 20 to 22 July, so the previous week or so. This is 21 an email from John Scott. I apologise for the 22 formatting, I think we have other versions that don't 23 have all the question marks but you can take it from me 24 this was an email that was sent from John Scott to 25 yourself, Hugh Flemington, Jarnail Singh and others. He 154 1 says, as follows: 2 "A review has been conducted in respect of 3 commercially sensitive and/or legally privileged 4 information, in particular with the management and 5 exchange of information subject to the Second Sight 6 review. Whilst most information within this group will 7 be legally privileged, nonetheless, if the information 8 was to inadvertently be sent to the wrong email address 9 or intercepted innocently or otherwise, once out in the 10 public domain it will be hard to control. 11 "Having agreed with Susan Crichton, with immediate 12 effect, all information should where possible be placed 13 onto a document and access is through a password 14 protocol. The procedure is easy to use and only takes 15 a matter of seconds." 16 Do you recall a discussion with John Scott in around 17 22 July relating to the protection of confidential and 18 sensitive information? 19 A. No, I don't. 20 Q. Do you think it's likely that it happened, given that 21 there is reference in that email to an agreement with 22 you? 23 A. Yes, I do think it's likely and I was always of the view 24 that, if it made sense, to use password protection, just 25 to avoid, as he said, you know, it being inadvertently 155 1 sent to the wrong person. 2 Q. Do you recall any conversation with John Scott around 3 this time about concerns relating to the circulation of 4 information relating to Horizon matters? 5 A. No, I don't think I do. 6 Q. There's mention there of the Second Sight review. Why 7 in particular did this concern relate to the Second 8 Sight review? 9 A. I think it was more the general exchange of information. 10 Q. Can we look at POL00006577. We're now on 2 August. So 11 a very similar time to when these conversations were 12 taking place with Paula Vennells and Alice Perkins. 13 This is a letter from Andy Cash; who was Andy Cash? 14 A. So he was one of the lawyers at Cartwright King. 15 Q. Thank you. We can see there it's "Dear Hugh and Susan", 16 so you were one of the recipients, "For the urgent 17 attention of [Hugh] Flemington and [Susan] Crichton". 18 He says as follows: 19 "I enclose for your urgent attention an advice 20 prepared by my colleague Simon Clarke. I am sure you 21 will appreciate that the advice is sent as part of our 22 brief to advise on the impact of Horizon issues and to 23 protect the reputation of [the Post Office]. It is 24 fully accepted that you may wish to take a second 25 opinion on the views expressed." 156 1 This is the Simon Clarke advice on the duty to 2 record information. Did you instruct Cartwright King to 3 provide that advice or was this something that was 4 provided voluntarily? 5 A. So I have a bit of a problem with the chronology here. 6 The copy of this letter came in relatively late and 7 I know there was quite a lot of discussion on the timing 8 with one of my former colleagues last week. I don't 9 remember seeing this in this form. I remember I think 10 I spoke to, later than 2 August, I spoke to Martin 11 Smith, I think. I think that is right. That's what it 12 says in my statement, I think, in relation to the advice 13 that was attached or enclosed with this letter. 14 Q. Let's look at the advice. It's POL00006799. Do you 15 recall receiving the advice? 16 A. Yes, but, again, I can't -- I think, probably, after I'd 17 had the telephone call from Cartwright King, I went off 18 to try to find what had happened to the letter. 19 Q. If we scroll down, please. Paragraph 2 says as follows: 20 "I advised that there ought to be a single central 21 hub, the function of which was to act as the primary 22 repository for all Horizon ... issues. The hub would 23 collate, from all sources into one location, all Horizon 24 related defects, bugs, complaints, queries and Fujitsu 25 remedies, thereby providing a future expert witness, and 157 1 those charged with disclosure duties, with recourse to 2 a single information point where all Horizon issues 3 could be identified and considered. The rationale 4 behind this advice derived from the need to protect [the 5 Post Office] from the current situation repeating itself 6 in the future. 7 "[The Post Office] accepted that advice and 8 according a weekly conference call meeting was 9 established so as to meet the requirement of the central 10 hub." 11 Over the page, please. He says at paragraph 5: 12 "At some point following the conclusion of the third 13 conference call, which I understand to have taken place 14 on the morning of Wednesday 31 July, it became unclear 15 as to whether and to what extent material was either 16 being retained centrally or disseminated. The following 17 if has been relayed to me: 18 "The minutes of a previous conference call had been 19 typed and emailed to a number of persons. 20 An instruction was then given that those emails and 21 minutes should be, and have been, destroyed: the word 22 'shredded' was conveyed to me. 23 "Handwritten minutes were not to be typed and should 24 be forwarded to POL Head of Security. 25 "Advice had been given to [the Post Office] which 158 1 I report as relayed to me verbatim: 2 "'If it's not minuted it's not in the public domain 3 and therefore not disclosable. 4 "'If it's produced it's available for disclosure -- 5 if not minuted then technically it's not'." 6 If we scroll down slightly, it says: 7 "Some at [the Post Office] do not wish to minute the 8 weekly conference calls." 9 Then on page 7 he gives his advice or his 10 conclusion. He says as follows: 11 "Regardless of the position in civil law, any advice 12 to the effect that, if material is not minuted or 13 otherwise written down, it does not fall to be disclosed 14 is, in the field of criminal law, wrong. It is wrong in 15 law and in principle and such a view represents 16 a failing to fully appreciate the duties of fairness and 17 integrity placed upon a prosecutor's shoulders." 18 Now, there is a discussion by the 14 August 2013 19 with John Scott, and I'd like to look at that. It's 20 POL00139690. If we scroll down to the bottom of that 21 page, please. There's an email from you on 13 August 22 about the Wednesday call: 23 "John -- as part of our remedial action I had asked 24 you to set up and chair this call. I have had very 25 worrying feedback re this call from [Cartwright King] 159 1 and it sounds like this is not being chaired, the 2 participants are unclear as to its purpose and no 3 minutes are being kept -- or there is confusion." 4 Now, it certainly seems that by 13 August, you had 5 considered the advice that I've just read. 6 A. So, from my memory, what happened is Jarnail and Hugh 7 had had a conversation to say that the calls were being 8 mismanaged and not achieving their objectives and it may 9 be at that point I went off to look for the advice, or 10 I had spoken to Martyn. I don't think I'd seen the 11 advice from Simon at that point because, if I had, 12 I wouldn't have contacted John Scott in these terms nor 13 would I have suggested he then carry on to chair the 14 calls because that would be illogical. 15 Q. Illogical or wrong? 16 A. Well, wrong, wrong, it would be wrong. 17 Q. How are you so confident, having not remembered detail 18 of a number of meetings today, that you didn't see that 19 advice by the 13 August? 20 A. Well, it's just this is relatively late on the 13th, 21 it's 8.30 in the evening. I'm not completely confident, 22 no. I wouldn't be completely confident but that's how 23 I think the logic worked. But, you're right, I can't be 24 completely confident. 25 Q. Because the covering letter to the advice was 2 August, 160 1 why does the timing, 8.30 in the evening, mean that it's 2 less likely that you saw the underlying advice? 3 A. Because, as I understood from the evidence that was 4 given last week, I actually didn't get hold of the 5 advice, the physical advice, as in -- until 14 August, 6 and then I wrote the letter to Cartwright King, which is 7 also in the evidence. But you're right: I can't be 8 completely certain. 9 Q. If we scroll up, please, we can read from this email. 10 It says, "Susan", this is from John Scott: 11 "The brief given by yourself for this meeting was to 12 provide in effect an under the radar escalation point 13 from across the business of issues that may impact the 14 integrity of the Horizon system. You were frustrated in 15 regards to the production and circulation of the Helen 16 Rose report and therefore did not want any electronic 17 communication which may be subject to [Freedom of 18 Information Act] or Disclosure." 19 Is that right? 20 A. No, that's not correct and that's not the reason I was 21 frustrated about the production of the Helen Rose 22 report. I thought that the idea of having a conference 23 call and a single hub was a very good idea and we should 24 have been doing it anyway. But what I did want was 25 there to be one single repository of the data so that we 161 1 had one version of what had been discussed, what had 2 been agreed, and what remedies were going to take place, 3 so that it was in one place and accessible. So I didn't 4 think it made sense to have a lot of different emails 5 flying around but I wanted it in one place, so that if 6 Cartwright King needed to find it, it'll be there, if 7 Bond Dickinson needed it, if anybody needed it, it would 8 be in one place and accessible and maintained, because 9 one of the issues with Post Office, as you've no doubt 10 realised, is that the document retention issues are 11 complex. So that's what I wanted. 12 Obviously -- 13 Q. This is a contemporaneous email, it's not a witness 14 statement that's been written -- 15 A. No. 16 Q. -- for the Inquiry with hindsight, a contemporaneous 17 email that says, very clearly, that you were frustrated 18 about the circulation of the Helen Rose report and you 19 didn't want any electronic communication, which could be 20 subject to disclosure. Why would John Scott say that to 21 you in an email, knowing that -- 22 A. I don't know. 23 Q. -- you could easily come back and say, "What are you 24 talking about"? 25 A. I don't know but the Helen Rose report was much more 162 1 about how it was prepared, why it took so long, how it 2 was disseminated to the Criminal Law Team or it wasn't 3 disseminated to the Criminal Law Team. 4 Q. That was a report that related to Horizon integrity 5 issues? 6 A. Yes, the Lepton. 7 Q. I'll continue: 8 "The conference calls have been set up and they are 9 chaired by a Senior Manager from the Security Team and 10 then I'm briefed thereafter (I wasn't aware I had to 11 specifically Chair, but that is easily remedied). At 12 the outset the purpose of the call was, given that this 13 was an informal escalation point and no electronic notes 14 would be taken or circulated and communication would 15 created. Written notes have been taken for each call 16 and activity has been driven behind the scenes. For 17 example a potential Horizon glitch was raised that had 18 been reported previously to Simon Baker. This was then 19 managed subsequently directly with Rodric Williams and 20 Steve Beddoe by myself in a manner to bring it under 21 legal privilege as far as possible." 22 What did you understand that to mean? 23 A. Presumably that something was raised by Simon, but 24 I would presume that to have been included in the 25 central repository. 163 1 Q. John Scott appeared before this Inquiry in Phase 4 and 2 his evidence was that you wanted things covered by legal 3 professional privilege; is that correct? 4 A. I think, certainly, there was a view from the civil 5 litigation lawyers on the call that they wanted to try 6 to protect information by legal privilege and, if you 7 look at some of the early minutes, it's discussed in the 8 call. 9 Q. At this stage, were you in charge of John Scott's 10 department? 11 A. I was. 12 Q. Did you therefore give him a direction that things 13 should be covered by legal privilege, as far as 14 possible? 15 A. No, I left that to the civil litigation lawyers that 16 were on the call. 17 Q. He certainly seems to think in this email that it was 18 you who gave that order? 19 A. I'm not -- I wouldn't -- I don't think I would have 20 done. 21 Q. Putting a potential Horizon glitch under legal privilege 22 so far as possible, that's very significant, isn't it? 23 A. It certainly seems so, yes. 24 Q. If we carry on, the next paragraph ends as follows: 25 "However, the nature of operating under the radar 164 1 and with memory fading of the rationale, from Martin's 2 perspective it would look disorganised without formal 3 terms of reference, electronic notes, action list etc." 4 Was this a group that was meant to be operating 5 under the radar? 6 A. Not as far as I was concerned because there's an email 7 from Rodric setting up the group and it clearly states 8 that -- who needs to be on the calls, we've got two 9 lawyers from external firms. It absolutely wasn't 10 operating under the radar, in that respect. 11 Q. He ends as follows: 12 "Clearly I will now attend the conference calls as 13 Chair and following on from the previous discussions and 14 the steer below, unless otherwise directed, this will 15 become a formal meeting with terms of reference, 16 electronic notes, actions and appropriate governance 17 within such approach. This will be built into the 18 operating and governance model and the previous notes 19 and actions over the last three will now be 20 electronically recorded and circulated. This does run 21 the risk that more communication will be generated 22 electronically with issues, reports and actions 23 responded to, etc that may include inappropriate 24 comments, opinion, assumptions that may be subject to 25 [Freedom of Information Act] and Disclosure (as in the 165 1 Helen Rose report)." 2 This correspondence with John Scott is occurring 3 around the same time as the CEO is complaining about 4 bland Board papers. Were you, at this time, seeking to 5 not include certain information provided to the Board, 6 and to keep information under legal privilege, so far as 7 possible? 8 A. No, that's not my recollection. 9 Q. Let's look at the response to Andy Cash, that's 10 POL00006797. We're on 16 August 2013. I think we heard 11 from Rodric Williams that he drafted this response; do 12 you recall that? 13 A. Yes, I saw that, yes. 14 Q. Was that your recollection? 15 A. Yes. Yes, it is my recollection. 16 Q. He says: 17 "Thank you for your letter of 2 August 2013 18 enclosing Simon Clarke's advice on 'Disclosure ...'; 19 unfortunately I had not seen your letter and was not 20 aware of it until Martin's email on 14 August." 21 So that was the evidence you've just been giving 22 about potentially not having seen it. 23 A. That's correct, yes. 24 Q. But that may or may not be correct, you're not sure. 25 A. So I think -- I thought it was a telephone call with 166 1 Martin but maybe it was an email saying, "Have you got 2 this letter?", I don't know. But I think it was the 3 time he was away, so it might well have come into him 4 because he was first on the envelope. But I'm 5 speculating. 6 Q. There is a suggestion in the evidence that Rodric 7 Williams had kept it in a drawer. What's your 8 recollection of that? 9 A. I think -- I just can't specifically recollect it but it 10 might be correct because we were so busy and because 11 Hugh was away and I think also Rodric had been on 12 holiday as well. 13 Q. Why would it be kept in a drawer if people were away? 14 The suggestion of a drawer is something slightly covert. 15 A. I don't know. I really don't know. 16 Q. Do you think there was an attempt to keep that advice 17 quiet? 18 A. No, I don't think so. 19 Q. "That advice was prepared as a consequence of statements 20 purportedly made in connection with the weekly 21 conference calls we established to share across the Post 22 Office Limited issues identified with the Horizon system 23 ... 24 "A key purpose of the Horizon calls is to ensure 25 Horizon users are promptly made aware of any issues with 167 1 it, so that these issues can be effectively managed." 2 Next paragraph: 3 "I am therefore deeply concerned at the suggestion 4 in Simon's note that there may have been an attempt to 5 destroy documentary material generated in connection 6 with the Horizon calls, specifically any minutes of the 7 calls. I note Simon's advice does not suggest that 8 material connected to the operation of Horizon itself 9 may have been compromised. 10 "Post Office Limited is committed to conducting its 11 business in an open, transparent and lawful manner. Any 12 suggestion to the contrary would not reflect Post Office 13 Limited's policy and would not be authorised or endorsed 14 by Post Office Limited. Accordingly, the purported 15 statements referred to in Simon's note do not reflect or 16 represent Post Office Limited's position." 17 That's not true, is it? 18 A. In what sense? 19 Q. Well, we've seen the email correspondence from John 20 Scott, saying that that was exactly the kind of thing 21 that he was doing intentionally. Do you think it was 22 fair or accurate to say "the purported statements 23 referred to in Simon's notes do not reflect or represent 24 Post Office Limited's position" when you had been told 25 by John Scott on 14 August that he thought that this was 168 1 an under-the-radar group that didn't want any electronic 2 communications? 3 A. I'm just trying to remember the order of things. 4 I think that what happened was that I went and asked 5 Jarnail what had happened and why this had come to the 6 fore but I think that was before this had come in. But 7 I also don't recollect having that conversation with 8 John. I just know that Rodric sent the email to set the 9 group up. There was some discussion in one of the first 10 sets of minutes about privilege. I don't recollect 11 either asking John Scott if he'd shredded documents or 12 not, which I would have done, had I seen the information 13 before that email had come in. So I'm just really a bit 14 confused about the chronology. 15 Q. I can assist you with the chronology. The chronology is 16 13 August you send an email to John Scott saying that 17 you had some worrying feedback from Cartwright King. On 18 14 August, John Scott responds to you saying that -- 19 referring to the under-the-radar escalation point and 20 saying that you didn't want any electronic 21 communication. Then on 16 August, you send a letter to 22 Andy Cash at Cartwright King, making no mention of any 23 confusion within the business as to whether electronic 24 records should be kept but instead referring to 25 purported statements in Simon's notes, which don't 169 1 reflect or represent Post Office Limited's position. 2 That's the chronology, isn't it? 3 A. I think that's right, yes. 4 Q. Yes, and why would you not be full and frank with your 5 own lawyers as to the contents of John Scott's very 6 recent admission in his email to you? 7 A. I think I was trying to be full and frank because 8 I think it was the intention, my intention that we set 9 up this hub, we ran this properly, there were minutes, 10 notes, and it was run from a central, you know, file, so 11 that people could have access to it. I didn't intend 12 for it to be under the radar, in that sense. 13 Q. No, but you had told, very shortly before you sent this 14 email, that the person who was meant to be chairing it 15 saw it as precisely that? 16 A. Yes, I should have put those two things together. 17 Q. Why weren't you full and frank with your own lawyers in 18 that respect? 19 A. I think I was. I think the Post Office was committed to 20 running that hub in the way that I've set out. I think 21 there had been some issues with regard to 22 operationalising that, which were obviously very 23 significant. 24 Q. Is there a missing paragraph in this letter that should 25 have said, "Oh, and by the way we have a rogue employee 170 1 who totally misunderstood the brief"? 2 A. I think if there's some correspondence or there's some 3 copy documents I've seen which seems to indicate that -- 4 and it goes to the cultural point about Post Office, 5 which is raised -- I can't remember which note it is -- 6 saying that people don't want this to be recorded, 7 whereas that was not my view. That was not my stance. 8 Q. Having received Simon Clarke's advice, did you press 9 John Scott any further as to whether anything had been 10 shredded? 11 A. I can't recollect that. 12 Q. The note in that advice about shedding, would that, in 13 your view be consistent with John Scott's email to you 14 of 14 August? 15 A. No, it wouldn't, but it would be consistent, I think, 16 with the type of thing that Jarnail had -- Jarnail Singh 17 had brought to my attention, with regard to the 18 confusion of the calls and what the purpose was and how 19 we could get the items, the issues nailed down and 20 properly described and moved forward. 21 Q. As General Counsel of the Post Office at this time, what 22 investigation did you carry out into those very serious 23 allegations that had been made in that Simon Clarke 24 advice? 25 A. My recollection was that I certainly went and spoke to 171 1 Mr Singh because he was on the call. I also think 2 I spoke to Andy Parsons and -- I'd obviously spoken to 3 Simon -- to Martin Smith and I think I asked John Scott 4 but I can't remember when. 5 Q. It might be suggested by some in the room that, by the 6 summer of 2013, you had now effectively drunk the 7 corporate Kool-Aid and were worrying about having given 8 Second Sight too much information. What would you say 9 to that suggestion? 10 A. No, I don't agree with that. 11 Q. Did you, by that stage, feel responsible for the damage 12 that Second Sight was said to have done to the business? 13 A. No, I felt responsible, I suppose, for Alice saying she 14 was blindsided -- Alice Perkins saying she was 15 blindsided at the Board, but I didn't -- on reflection, 16 after -- I didn't consider that to be the case. 17 SIR WYN WILLIAMS: Is that a convenient moment for our 18 afternoon break? 19 MR BLAKE: That is, sir, yes, thank you very much, could we 20 come back in 10 minutes' time. 21 SIR WYN WILLIAMS: Yes. 22 MR BLAKE: Thank you very much. 3.25. 23 (3.17 pm) 24 (A short break) 25 (3.25 pm) 172 1 MR BLAKE: Thank you, Mrs Crichton. 2 We're going to stick with August 2013 and just look 3 at some other developments that occurred at that time. 4 Can we bring up on to the screen POL00116218, please. 5 I'm going to start on page 2, the bottom of page 2. Can 6 we have a look at the very bottom email, please, and 7 over to the next page. 27 August, Alwen Lyons emails 8 Paula Vennells a draft note for the Board and it says as 9 follows: 10 "Paula [I think it says 'here'] is the message for 11 the Board, can you let me have any amends. Would you 12 look in particular at the HR piece as these are my words 13 and you may want to change them." 14 If we scroll down we can see "Horizon -- 15 Announcement of independent Mediation Scheme for 16 subpostmasters (Project Sparrow)": 17 "We have today announced the introduction of 18 an independent Mediation Scheme to address the concerns 19 raised by some subpostmasters regarding cases which they 20 feel require further resolution." 21 It says: 22 "The Post Office, JFSA (Justice for Subpostmasters 23 Alliance) and Second Sight, the independent 24 investigators, have formed a working group to 25 collaboratively develop and monitor this scheme which is 173 1 available to current and former subpostmasters from 2 27 August 2013." 3 So we have, by now, 27 August, established the 4 Mediation Scheme and the Working Group. If we scroll 5 up, please, there's an email responding to this from 6 Paula Vennells to Alwen Lyons and you, and she says: 7 "Alwen, thank you for this. I'll get back to you on 8 one section I'm reviewing but wanted to get Susan in the 9 loop on Horizon [as soon as possible]." 10 She says: 11 "Re Horizon: I think there is too much detail 12 [regarding] the release but nothing on reassuring the 13 Board [regarding] mediation. They will want to know how 14 we plan to manage any associated risks. 15 "Susan, a couple of questions to help position this: 16 I have just read the mediation pack tonight: [page] 10 17 states clearly that compensation can be a possible 18 outcome. When we discussed this, the hope of mediation 19 was to avoid or minimise compensation but as far as 20 I can see the pack doesn't really suggest any other 21 outcome. (Difficult to do I know). And so, this will 22 be the page that [subpostmasters] may attention to. You 23 explained that there were steps in place to advise 24 [subpostmasters] entering the process that this was 25 a chance to be heard and not to expect compensation. 174 1 [However] are we planning to manage those expectations? 2 And where compensation may be offered, you mentioned 3 small figures in the £3,000-£5,000 band: can we give 4 a range of costs?" 5 Was that your understanding of the Mediation Scheme? 6 A. In the sense of compensation? 7 Q. Well, Paula Vennells gives the impression in this email 8 that the hope of mediation was to avoid or minimise 9 compensation and that, if there was to be compensation, 10 it would be only small figures. 11 A. So I think my view -- my recollection at the time was 12 that compensation could easily be one of the outcomes 13 and we wouldn't know what level it would be. I mean, 14 there is some documentation which looks at things like 15 compensation for -- I can't remember now, loss of 16 contract or something, and there is some mention 17 somewhere of those kinds of figures but we wouldn't 18 actually know until we'd started the scheme. 19 Q. From your recollection, in relation to this email and 20 general conversations that were had at the time, was the 21 business at that stage a little concerned about what the 22 result of the Mediation Scheme could possibly be? 23 A. Yes, I think it probably was. 24 Q. Can we turn to POL00194465. Just very quickly I want to 25 go to that bottom email. It seems that, by 29 August -- 175 1 this is an email from Chris Day to Alice Perkins, you're 2 copied in: 3 "I have discussed this with Susan and asked her to 4 negotiate a monthly cap of £25,000 with [Second Sight]. 5 In addition, [Second Sight] have agreed to transition 6 out (subject to our in-house team being sufficiently 7 competent/independent in both carrying on with existing 8 investigations and supporting [subpostmasters] 9 appropriately) over the coming months; depending on the 10 incidence of new cases arising and the rate of take up 11 ..." 12 Over the page, please: 13 "... Susan's view is that this is likely to be 14 achievable by the end of this calendar year or latest 15 first quarter of 2014." 16 So it seems as though, by this stage, Second Sight 17 were being transitioned out of the picture. 18 A. What was going to happen, the way the Mediation Scheme 19 was going to work, from memory, is that they would be 20 part of the Mediation Scheme and they would look at the 21 subpostmasters' cases to make sure that there was enough 22 information there for mediation or they would be sitting 23 in that central hub there. So it was transparent in 24 that respect, they were still going to be part of the 25 Mediation Scheme and, I think, on my part, that was 176 1 absolutely a best guess as to how long it would take to 2 do that. We didn't know. We hadn't started. 3 Q. Looking back at all of those emails that we've seen this 4 afternoon and this morning, do you think that the Post 5 Office was genuine in wanting to get to the bottom of 6 the problems with Horizon? 7 A. I felt I was genuine and I thought you might ask me 8 about the Mediation Scheme, so I have reflected on that. 9 I know that I was genuine, my attempt to set it up in 10 the way I believed would work and would work for 11 subpostmasters. I'm really not sure what the Post 12 Office wanted from that at that stage. 13 Q. Do you think that the Executive Team really wanted 14 an independent investigation? 15 A. In 2012? 16 Q. Yes. 17 A. I know that I thought it was the right thing to do. 18 I don't know about other people on the Executive Team. 19 I can reflect and say, well, maybe they didn't but 20 I don't know. I don't know. 21 Q. The picture that's painted by some of those emails that 22 we've been looking at is that, when things suddenly 23 weren't going the Post Office's way in that independent 24 inquiry, it seems that there was an attempt to cover 25 that up in some way by using legal professional 177 1 privilege, bland Board statements, using words other 2 than "bugs"; do you agree with that? 3 A. That was not my intention at the time, from my 4 recollection. 5 Q. How about the intention of others? 6 A. I can't speak for other people. I really can't. 7 Q. Well, let's look at a filenote from Paula Vennells, 8 POL00381629. This is a filenote that's very recently 9 been disclosed by the Post Office. I think you may have 10 had it only yesterday. It starts, it says, Friday, 11 30 September. 30 September was actually a Monday and it 12 looks, from the context of this document, likely to have 13 been 30 August because we then scroll down and we can 14 see a meeting on 2 September. Does that -- 15 A. I think it must have been 30 August. 16 Q. 30 August. I'm going to take you through, as I have, 17 those other filenotes, quite slowly and carefully. 18 "Purpose: Susan had asked me earlier in the week how 19 I felt about her continuing in the business and what job 20 I was expecting her to do. I was slightly surprised 21 that she had raised the issue again -- we had already 22 had a conversation where I said I had wanted to help her 23 restore her reputation after the Board discussion. But 24 again I said I wanted her to do what I had asked of her 25 prior to my holiday, ie to get on top of the new 178 1 processes, to lead the business through the Mediation 2 Scheme and to help me use this as a catalyst to change 3 the culture, so we 'listened' more." 4 So that's a reference to the Board discussion of 5 16 July 2013? 6 A. I assume so. 7 Q. Did you understand that to be the purpose? 8 A. I have to say, I can't remember this meeting. So I just 9 can't remember it at all. 10 Q. It says: 11 "Susan was very, very angry. She yelled at me. She 12 thinks this has damaged her reputation. She was upset 13 that Alice had commissioned the RH review." 14 Is that the Richard Hatfield review? 15 A. I think it must be -- yes. 16 Q. That was a further review that was going to be a Lessons 17 Learned exercise; is that right? 18 A. That is correct. 19 Q. Now, you may not be able to recollect this meeting, but 20 can you recall not being happy with the commissioning of 21 the Lessons Learned Review? 22 A. I was not, no. I felt it was an inappropriate use of 23 funds, if you like. I thought we should get on and get 24 the Mediation Scheme going. 25 Q. Why would it be an inappropriate use of funds? 179 1 A. Because it was just going back over old ground again. 2 Q. "She was cross that I hadn't got her the [terms of 3 reference] before I circulated it to Alice, Alasdair and 4 RH [Richard Hatfield]. She was convinced there was 5 a breakdown of trust [especially] between her and Alice. 6 But with the Board generally. Although she did say that 7 all the Board except Susannah had been in touch." 8 We've seen previously the reference to you being 9 worried you were going to be a scapegoat. Is this in 10 a similar vein? 11 A. Yes, I think so. 12 Q. Susannah, is that Susannah Storey? 13 A. Is that the ShEx representative? 14 Q. Yes. 15 A. Yes. 16 Q. Would it have surprised you that she hadn't been in 17 touch or are we not to read anything into that? 18 A. Not really. I mean, also I think they hadn't 19 necessarily all have been in touch, they might have sent 20 an email or popped into the office or something. 21 Q. "I explained I had simply not the time to give her the 22 [terms of reference] -- Dave Ward call/CWU 23 [Communication Workers Union] discussion with CD/KG." 24 Are you able to assist us with that? 25 A. I'm guessing it would be -- oh, Chris Day and Kevin 180 1 Gilliland. 2 Q. "I said if she felt some changes were needed then 3 I would be happy to consider them. She suggested that 4 our external lawyers Bond Dickinson should be involved. 5 I said if that helped I couldn't see why not and would 6 think about it." 7 Now, she said "I explained I had simply not the time 8 to give her the terms of reference"; do you think that 9 was true? 10 A. On reflection, no. 11 Q. Why not? 12 A. Because it would only have meant sending -- forwarding 13 an email. 14 Q. "It is clear that the RH review has destabilised her. 15 She shouted that she was looking at other jobs. She 16 threatened that we would have to back her -- implying of 17 the importance of references. 18 "She again raised that Alice had made mistakes. 19 I reminded her that we probably all had and Alice had 20 accepted that [Richard Hatfield] needed to be 21 even-handed. I reminded her again that I had raised 22 (with Alice) the 'issue' of Alice also needing to be 23 interviewed. And I said that whilst I would be asking 24 Alice about couple of challenges Susan raised (Alice 25 believing Donald and BIS comments about a [Post Office] 181 1 cover-up?), I wanted to be loyal to the Chairman as 2 I believed she had imagined the [Richard Hatfield] 3 review would be a way of moving on." 4 There's quite a lot to unpack in that paragraph. 5 Can we begin by looking at the issue between you and 6 Alice Perkins. Did you feel that the review was, in 7 some way, Alice Perkins setting you up? 8 A. I think that's what I thought at the time, that would be 9 my recollection, yes. 10 Q. "Alice believing Donald and BIS comments about a [Post 11 Office] cover-up"; can you assist us? 12 A. I can't remember that. 13 Q. It's quite important for this -- 14 A. I absolutely understand and the problem I have is that 15 I can't remember this meeting at all. I'm sure, you 16 know, it's written contemporaneously, as you've said, 17 with other things, so I'm sure it must have happened but 18 it's so far out of my normal range of behaviour, the 19 shouting and the -- especially in a public place -- 20 well, anyway, but I just can't remember it. 21 Q. It then says: 22 "(I also wanted to see if we could get ourselves 23 back on an even keel: Susan is clearly making lawyers 24 notes on everything; and I would like the two of them to 25 repair their relationship. I'm not sure how doable the 182 1 latter is but to have it breakdown totally at present is 2 not in anyone's interests). 3 "So I mostly listened and took the anger. 4 Eventually, she calmed down and I said I would 5 (genuinely) like to help her find a way through this. 6 She began to be positive again and as we walked back to 7 148 ..." 8 Is that the Post Office building? 9 A. Yes. 10 Q. "... Susan suggested I join her and her HR team for her 11 moving on supper. I thanked her, and said I would be 12 happy to do that, and to say how sorry I was that it had 13 happened so quickly; that she had helped me make the 14 function much stronger and I was grateful to her." 15 At that point, is that moving on just from the HR 16 team not from the whole business or -- 17 A. That was just moving on from the HR team. 18 Q. If we go over the page, please, there seems to be 19 another meeting on Monday, 2 September 2013. There was 20 another note, sorry, of that date and she says as 21 follows: 22 "Over the weekend I reflected that ounces request to 23 been in BD ..." 24 I think that's Bond Dickinson, is that your reading 25 of it? 183 1 A. Yes, it is. 2 Q. "... was more about her lack of confidence and decided 3 to reassure her that I was happy to take her opinions -- 4 to demonstrate confidence in her." 5 It then says: 6 "Susan then told me it didn't matter because she 7 couldn't do her job any more." 8 Just pausing there, there was a second meeting, was 9 there, on the Monday? 10 A. I'm -- I found this note really quite confusing. 11 I couldn't work out whether -- what was reflection and 12 what was the meeting. I recollect that with my view at 13 the time, and it was becoming into sharper focus that 14 I could no longer do my -- no longer continue in my role 15 at the Post Office if I didn't have the trust and 16 confidence of the Chair, the Board and the CEO. 17 Q. We saw that, on the first page, it was a meeting at 18 Costa Coffee, Old Street. Here it says meeting room 19 3.00 pm, so it does look as though there was a further 20 meeting on the Monday? 21 A. Did you say it does look? 22 Q. It does look? 23 A. Yes, I think that that's right. It does look like that. 24 Q. "Susan ... told me that it didn't matter because she 25 couldn't do her job any more. The RH review was not the 184 1 right action for the business. We had ruined her 2 reputation and compromised her. Professionally, she 3 needed to point out that the RH review shouldn't happen 4 as not being legally privileged, it could be detrimental 5 to the business but Alice would not believe her and 6 instead see her view as defensive. Therefore she could 7 no longer be effective: a General Counsel cannot operate 8 if they don't have the confidence of the Chairman/Board/ 9 CEO. I repeated she had my confidence and I cited other 10 business issues in the last several days where I had 11 sought her counsel. I am trying to help her repair the 12 situation. She pointed to the impossibility of her ever 13 coming before the Board. I disagreed -- she will have 14 spoken to all of the Board. And I reminded her that 15 Alice wanted an open and even-handed RH 'lessons 16 learned' review." 17 We saw that at that earlier board meeting you hadn't 18 been allowed into the room or hadn't been invited into 19 the room. Did you think that, from that point onwards, 20 it was or was not possible for you to effectively attend 21 board meetings? 22 A. I suppose I came to the conclusion or the realisation 23 it's something you never -- I never expected to happen 24 to me and it took me some time to adjust to what had 25 happened and understand it, and it was clear to me that 185 1 I was just -- I felt I couldn't continue in my role, and 2 I think that was further exacerbated by the way that the 3 responsibility for HR had been removed from me. 4 Now, I agree that was the right thing to do for the 5 business but it was the way it had been done. So 6 I think mentally I was in a bad place, I think I can 7 say. 8 Q. The suggestion in that paragraph might be that Alice 9 Perkins thought that you didn't want to be scrutinised 10 by the Lessons Learned Review; was that your 11 understanding of hers or Paula Vennells' position? 12 A. No, I don't think so. 13 Q. Can we scroll down, please. She says as follows: 14 "I wonder if Susan is overreacting to the ... 15 review. But she could be right. She will undoubtedly 16 make the legal case against it. Emotionally, she may 17 just throw in the towel if we decide to press ahead. 18 This may also be her way of saying she can't cope with 19 much more pressure at present. 20 "If Susan leaves in the short-term, that will be 21 a major setback. She has stabilised the project [which] 22 is demonstrating that she wants 'right to the wrongs' 23 (my words, not hers). And importantly, the external 24 stakeholders have responded positively and she has the 25 confidence of the internal team." 186 1 She says not your words but hers, in terms of "right 2 the wrongs"; what did you understand that to be 3 a reference to? 4 A. I think she's referring to the fact that's how she felt 5 about the Second Sight review and my handling of the 6 Second Sight review. 7 Q. Could we scroll down, please: 8 "I need to find a way of calming this down. And 9 buying us some time to think carefully. We can do 10 a 'lessons learned' internally. And if we do it 11 ourselves, then there could be some reconciliation. How 12 we handle this will say a great deal about the values of 13 the business." 14 Then she provides some further reflections. She 15 says: 16 "In both meetings, Susan was very emotional. She is 17 hurt. Her ego and self-esteem have been undermined. 18 She swings between wanting to get away from it all with 19 a settlement and leave immediately, to building a case 20 to fight and defend her reputation, to accepting that 21 the most satisfactory outcome would be to restore her 22 reputation by managing the mediation scheme through to 23 a satisfactory ongoing process." 24 Just pausing there, is she right there; is that 25 a fair reading of your feelings at that time? 187 1 A. Reading this back, because it is quite a blur, it 2 probably is, but I really can't remember specifically. 3 You know, I've been a lawyer for a long time and then 4 I'd worked in a number of different companies. I never 5 expected to find myself in this position. 6 Q. "Each time, we finished the meeting positively. 7 "Susan had said to me prior to my leave, that she 8 would never have put a business she worked for in the 9 situation we found ourselves with the [Second Sight] 10 interim report, and she wished she had never allowed 11 Alice to persuade her to do the independent review. She 12 should in her view have resigned over it at the time." 13 That suggests that you regretted getting Second 14 Sight involved. 15 A. I didn't regret getting Second Sight involved. I think 16 what I regretted is that I hadn't been clearer, if it 17 was appropriate, about my role in the Second Sight 18 review and what I meant by being independent. 19 Q. We've seen some evidence and some documents that 20 referred to, effectively, you convincing Alice Perkins 21 to do the independent review and here we have the 22 suggestion that, in fact, it was the other way around. 23 A. I think Alice was driving the independent review and 24 I think in her notes you see her initial intention that 25 the MPs' cases should be reviewed but that gradually 188 1 cooling as we go through the process. 2 Q. What reasons do you think there were for that cooling? 3 A. The length of time -- so, practical, I think the length 4 of time it was taking; the cost it was taking; and the 5 fact that she considered I wasn't controlling it 6 appropriately. 7 Q. What about the damaging things that Second Sight had 8 discovered relating to Horizon? 9 A. Yes, obviously, they would be included as well. 10 Q. "My reflection on what happened with [Second Sight] as 11 I write this today [2 September] is that Susan was 12 possibly more loyal to her professional conduct 13 requirements and put her integrity as a lawyer above the 14 interests of the business. She did not communicate 15 clearly what she was concerned about. If as she says 16 she felt compromised (personally and for the business) 17 by being asked to manage [Second Sight] more closely, 18 then her misjudgement was that she did not make that 19 clearer to me on the two or three occasions that I asked 20 her to do so." 21 Do you agree with what's said there? 22 A. Yes -- well, as I say, I can't remember this 23 conversation -- oh, it's her reflection, isn't it? So 24 this wasn't a conversation that we had; this was her 25 thinking about it afterwards. 189 1 Q. Yes. So, for example, managing Second Sight more 2 closely, did you see that as, in some way, in conflict 3 with your role as a lawyer? 4 A. I think what I would have said was that I wanted to 5 ensure that their report was independent and I wouldn't 6 try and control them in a way that didn't give them 7 access or ability to write the report in their way, 8 provided it was evidence based. 9 Q. The reference there to putting your integrity as 10 a lawyer above the interests of the business, what did 11 you see your role as, in terms of being General Counsel? 12 Was it integrity as a lawyer or was it interest of the 13 business, or were they in conflict? 14 A. I had never experienced a situation where my integrity 15 as a lawyer was in conflict with the business that 16 I worked for. I was just very focused on delivering the 17 independent report from Second Sight. So if that meant 18 that I put my integrity as a lawyer above the interests 19 of the business, then possibly that's what I did. 20 I didn't see it quite in that way at the time. 21 Q. "Susan believes the person who compromised her is Alice. 22 Alice met [James Arbuthnot] partway through the review 23 and, according to Susan, Alice agreed with [James 24 Arbuthnot] that [Second Sight] had to 'keep the JFSA 25 happy'. Susan believed that an independent review meant 190 1 that she could not/would not then intervene to change 2 the biased opinions that Second Sight reached because 3 they were 'keeping the JFSA happy'. It took some strong 4 persuasion for Susan to accept (which I am clear she 5 did, as she was disappointed with it) that the first 6 interim report needed [Second Sight] to amend it. The 7 Board and the external stakeholders only saw the second 8 version." 9 Can you assist us with your views on that? 10 A. So my recollection is that, when I got the first version 11 of the Second Sight Report, which hasn't appeared in any 12 of the documents, that some of the flavour of the report 13 was not focused on the evidence but rather focused on 14 a somewhat emotional interpretation of the facts, and 15 this was when I had the discussion with Second Sight to 16 say, you know, "What you write needs to be evidence 17 based and needs to be put in those terms". 18 But we had a discussion about it. I wouldn't have 19 been able to force them to do that but we just had 20 an exchange of views. 21 Q. Can we scroll down, please. 22 "Wider performance context: 23 "Up until this time, Susan has been a wise (if risk 24 averse -- we had discussed this), General Counsel. She 25 worked long hours professionally for the business 191 1 steering the [Post Office] through the MDA and MSA, 2 during the separation from Royal Mail." 3 It says, "(if risk averse -- we had discussed 4 this)"; do you recall a conversation with Paula Vennells 5 about you being risk averse? 6 A. No, I can't and I wondered if -- oh, no. 7 Q. That could be a discussion with somebody else, perhaps? 8 A. I wonder if she'd discussed it with Alice? I don't 9 know. 10 Q. It says further down: 11 "She agreed that she would relinquish the HR 12 function ... 13 "When we were faced with the urgency of handling the 14 Second Sight interim review fallout (ministerial 15 statement to Parliament, high profile media etc), I told 16 Susan that I was minded to implement that decision 17 immediately, so that she could concentrate the [Second 18 Sight] handling. Fay would take on HR reporting ... in 19 the interim. Susan agreed. 20 "HR Announcement: 21 "When I returned from holiday, I was told by Alwen 22 that Susan had been upset because I had not spoken to 23 her about the timing of the announcement. She indicated 24 ... that could be construed as constructive dismissal; 25 but then qualified her comments by confirming she did 192 1 not know and had not been involved twice in the decision 2 making process." 3 Is this related to you relinquishing the HR role? 4 A. Correct. 5 Q. Yes. What's your recollection of that? 6 A. So I don't remember discussing it twice. In retrospect, 7 with hindsight, it was absolutely the right thing to do. 8 Just the HR made that -- the addition made that job very 9 difficult to do. 10 Q. Can we please look at POL00381658. 11 Before we look at that other document, what are your 12 general reflections on this note, having now seen it and 13 going through it? 14 A. I find it quite shocking because I'd got into that kind 15 of situation. As a personal reflection, it's quite 16 distressing, I think. I must have been in a really bad 17 state. 18 Q. Does it give you any insight into how the company was 19 run at the time? 20 A. So if I put myself in Paula's position -- and I have 21 been in this position with people I've worked with and 22 for over the years -- I would have packed myself up on 23 a month's sick leave and said, "Don't come back until 24 you feel better and have got things in perspective". 25 Q. Did that happen? 193 1 A. No. I mean, I don't know whether you're going to go on 2 to it but, shortly after this, I had already taken some 3 legal advice and I gave Paula Vennells 4 a without-prejudice letter, which set out the terms on 5 which I would agree a settlement to leave POL and I left 6 POL effectively at the end of September because we went 7 on holiday. I came back in for a day or so in October, 8 and then I was on gardening leave in November. 9 Q. Can we look at POL00381658, please. This is an email 10 exchange between Paula Vennells and Alice Perkins of 11 7 September 2013, so the month that you've said you 12 effectively left. She says: 13 "My approach needs to remind Alasdair ..." 14 Who was Alasdair, sorry? 15 A. I think that was Alasdair Marnoch, the chair of the ARC. 16 Q. "... where we left off, then to paint the story to 17 arrive at the conclusion carefully. [Especially] as the 18 last time we spoke, I had been in the place of trying to 19 help Susan repair the damage. So that will be a change. 20 "I think he will understand. Alasdair had raised 21 a couple of questions re Susan's judgement, but less 22 than others. 23 "Regarding speaking to Susan, I had a tip-off from 24 Alwen that Susan may raise it with me on Monday herself. 25 They spoke midweek: Susan said it was making her ill and 194 1 she didn't see how she could continue having lost the 2 confidence of the Board." 3 It says: 4 "Exactly the same conclusions. 5 "Although that makes it slightly easier if she does 6 raise it, people can change their minds (not tidy!). So 7 I shall wait and see what happens. Either way, assuming 8 Susan is in 148, we will have the conversation on 9 Monday. 10 "I'm speaking to Fay this weekend as we will need to 11 be thinking about which lawyers we use, interim cover 12 and about business messages. And indeed when Susan 13 goes. It sounds as though she wants that to be straight 14 away. Much will depend on Susan's state of mind. 15 I have been in situations like this where people have 16 been helpful and suggested the best outcomes themselves. 17 Susan is capable of doing that but I'm not holding my 18 breath. 19 "I hope this sounds calm -- I am -- on the outside 20 ... on the inside, it was never going to be easy. (But 21 it's nothing to what Susan is going through, 22 irrespective of what caused it). 23 "Thank you for your support -- and helpful questions 24 are always welcome." 25 "Irrespective of what had caused it": I mean, did 195 1 you believe Paula Vennells to have understood your 2 reasons for leaving? 3 A. No, I don't think she did. 4 Q. Why not? 5 A. I don't think she understood my point about this has to 6 be an independent review, we can't manage it or 7 manipulate it in the way that, possibly, Alice was 8 expecting me to do, and this is all supposition on my 9 part. Either way, I had decided that the time was to 10 draw a close to this chapter in my career. 11 Q. Can we please look at UKGI00007316. These are key 12 points from a Second Sight meeting that relate to after 13 your time. It says as follows: 14 "Interesting snippets include: 15 "Ron Warmington used to work with former POL 16 [General Counsel] Susan Crichton at GE -- that is how 17 they were introduced to [James Arbuthnot]. 18 "[Second Sight] link the 'change in approach' by 19 [the Post Office] to Crichton's departure (in November 20 2013 according to LinkedIn). 21 "Slight dig at how [the Post Office] are 'on their 22 third or fourth [General Counsel] since Crichton left'. 23 "Ian Henderson worked for the CCRC for 4 years. 24 Said they take a very narrow and technical view of 25 miscarriages of justice." 196 1 Were you aware -- I know you weren't working in the 2 business -- but of any change of approach of the Post 3 Office after you had left? 4 A. No. 5 Q. Did you have any discussions with Second Sight, for 6 example, after you had left? 7 A. No, no. I don't think -- no, I don't think I've -- no, 8 I don't think so. 9 Q. Looking at the way things were going when you did leave, 10 do you think it was likely or unlikely that the Post 11 Office would become more restrictive towards Second 12 Sight? 13 A. I suppose, reflecting on the discussions today, that 14 they would become more restrictive, although I hoped, 15 I genuinely really hoped, that the Mediation Scheme 16 might move the process forward. 17 MR BLAKE: Sir, I have a number of miscellaneous topics to 18 move on to. It's been quite a long day today. I'm in 19 your hands. We have plenty of time tomorrow. I can 20 either start on those topics -- 21 SIR WYN WILLIAMS: Mr Blake, if you're trying to persuade me 22 that after a long, hard day we should stop now, then you 23 needn't say any more. 24 MR BLAKE: Thank you very much, sir. 25 SIR WYN WILLIAMS: I'm sorry, Ms Crichton, that you will 197 1 have to come back tomorrow. I'm grateful to you for 2 agreeing to do that. These are arduous sessions and, in 3 making the observation which I did about Mr Blake 4 doesn't need to persuade me any further, rest assured 5 I've had regard for you, as well, and, although I have 6 no doubt that you want this over as quickly as possible 7 and as efficiently as possible, there's a limit to how 8 many questions you can reasonably be asked to field in 9 one day, and you have fielded a good many. 10 So I think it's time to stop, all right? 11 MR BLAKE: Thank you very much, sir. Mrs Crichton is 12 a lawyer and will have well in mind the prohibitions on 13 speaking -- 14 SIR WYN WILLIAMS: Yes, I'm sure she will. I should think 15 the last thing that she will want to do is to talk about 16 this but if you do get tempted to talk about it, 17 Ms Crichton, resist the temptation. 18 THE WITNESS: Thank you, sir. 19 MR BLAKE: We're back at 9.45 tomorrow. 20 SIR WYN WILLIAMS: 9.45, and I'm reminded that there will be 21 a fire test as usual on a Wednesday morning at 10.00, so 22 I simply propose that, if you are still asking 23 questions, as I assume you may be at that point, 24 Mr Blake, you simply stop very shortly before 10.00 and 25 we just all sit quietly through the fire alarm and then 198 1 start again. 2 MR BLAKE: Yes, that's correct, sir. 3 SIR WYN WILLIAMS: Fine. 4 MR BLAKE: Sir, I'm reminded by Mr Wallis that today is 5 three years since the quashing of the convictions. 6 SIR WYN WILLIAMS: Yes. 7 MR BLAKE: No doubt those present will be marking that 8 today. 9 SIR WYN WILLIAMS: Well, I have no doubt that, as each year 10 goes by, never mind three years, that would be something 11 which is always embedded in the minds of very many 12 people. 13 All right. See you tomorrow. 14 MR BLAKE: Thank you very much. 15 (4.04 pm) 16 (The hearing adjourned until 9.45 am the following day) 17 18 19 20 21 22 23 24 25 199 I N D E X SUSAN ELIZABETH CRICHTON (sworn) ..............1 Questioned by MR BLAKE ........................1 200