Paula Vennells denies shielding board from Post Office's 'dirty laundry'

It's been a heavy, technical afternoon at the Post Office inquiry as Jason Beer KC grilled Paula Vennells for the second day.

Here's a look back at what was said:

• Vennells denied trying to offer only a "meagre sum and apology" to sub-postmasters without investigating the cause of their problems
• She apologised for her decision to call the Horizon issues "exceptions" or "anomalies", saying they should have been called 'bugs'
• She also rejected that the company's executive team, which she led, shielded the board from "dirty laundry" - instead saying that she felt "very strongly" about the board being able to challenge her
• Vennells also denied that concerns from her media adviser about negative news coverage influenced her decision on whether to review five to 10 years' worth of past prosecutions
• She said she did not try to close down a review into the Horizon software that led to wrongful convictions of sub-postmasters

This week is the first time Vennells has publicly spoken about her role in the scandal for nearly a decade.

She will be back at the inquiry for one more day tomorrow.

Whenever Alan Bates' name is mentioned in the inquiry room - particularly when it involves letters or emails he's sent - people's ears prick up.

Shortly before the inquiry closed up, we were shown an email from 2012 that Bates sent to George Thomson, former head of the National Federation of Sub-Postmasters union, about the upcoming Second Sight investigation into issues with Horizon. It's here:

Post Office InquiryCopyright: Post Office Inquiry

We've also been shown that the email was then forwarded by Thomson to the Post Office's Nick Beal - with Vennells lopped in - calling Bates' words "rubbish".

"I will tell him Horizon is secure and robust and to go away," Thomson added in his forwarding of the email to Beal. I note some low-level gasps in the room.

In the midst of giving her thoughts on the email to the inquiry, Beer suggested it's in fact Thomson's email that's "rubbish".

Amid laughs and scoffs from the audience, Vennells said that, with hindsight, she agreed.

The inquiry is shown an email in February 2019 from Tom Cooper, who worked for UK Government Investments and was the government's representative on the Post Office board.

This email was sent a few months before Vennells left her role at the Post Office.

In it, Cooper asked how courts could protect the Post Office from journalists overstating evidence about Horizon.

Vennells said in response that the strategy to minimise coverage in mainstream media had worked well.

Asked about this statement, Vennells tells Beer the strategy was to manage misrepresentation in the media so people wouldn't get confused between the legacy Horizon system and the newer version of the accounting software.

Continuing to press Vennells on the theme of seeking to control the narrative, Beer draws attention to an email she sent to a group of senior Post Office executives.

The email refers to comments from her "engineer/computer literate husband" who gave a "non-emotive" alternative word for computer bugs or glitches.

Vennells set out in the email that he suggested to use the word exception or anomaly or even conditional exception/anomaly.

Beer asks Vennells this afternoon whether she considered the words bugs or glitches to be emotive.

Vennells says she's not sure why she used the term emotive. She adds that at the time, although it turned out to be wrong, she had thought the two concerned bugs had been fixed and she was trying to avoid any misinterpretation in relation to the work by Second Sight and the Horizon computer system.

"I should not have sent the email," she says.

She adds that she, and the rest of the organisation, should have used the word bugs.

The Post Office Inquiry has closed for the day, but we have a final few important exchanges to bring you before we close our coverage here.

Beer now turns to what he describes as attempts by the Post Office to control the narrative, taking Vennells through her witness statement which says she doesn't believe there was a culture within senior management to prevent complaints against Horizon.

The inquiry's lead counsel then highlights an email from David Simpson, communications director for Royal Mail Group, which Vennells is copied into.

He writes that the new edition of Private Eye has an article about Horizon and criticism from sub-postmasters, suggesting writing to the publication to emphasise that it is "the courts" and not the Post Office that convict people.

Susan Crichton, the Post Office's top Lawyer, replies to say she doesn't think they should contact Private Eye as it is old news.

But Vennells writes back that she disagrees and that a goal of hers is to counter anything that has a reputational impact.

Beer asks why she specifically wants local press to be scoured for negative stories.

"It's a hypothetical statement," she says, to try and illustrate how important it was that the Post Office was portrayed in the way that people loved and trusted it.

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Jason Beer KC displays a note where Vennells had written that general counsel Susan Crichton was more loyal to her professional conduct requirements and put her integrity as a lawyer above the interests of the business.

When had Crichton done that, asks the barrister.

"I wrote this completely wrongly," replies Vennells, adding that she indented to say Crichton had two parts to her role, one to her professional responsibilities as a qualified lawyer and another to the Post Office as a businesses.

The former CEO says she meant to express that Crichton hadn't led the project management side of the Second Sight review "as well as she could have done".

"I'm genuinely very, very sorry, I did not mean this in the way that it could be read," says Vennells.

Beer is asking Vennells if she blamed Susan Crichton for the Second Sight review.

"If the project hadn't worked out, as had been originally planned, she had some accountability for that part of it," she says.

"I didn't blame Susan, that wasn't my style."

Vennells says the board had asked her if Crichton was the right person leading it going forward, adding that she believes she expressed her view that Crichton was.

We're now seeing a file note from August 2013 on reflections Vennells had made following a meeting with Crichton at a Costa Coffee.

"Susan was very, very angry. She yelled at me. She thinks this has damaged her reputation," Beer reads from the file note.

Vennells' reflections mentioned that Crichton had raised that Alice Perkins, the Post Office chairman from 2011 to 2015, had made mistakes.

She said in the file note she'd told Crichton that "we probably all had".

The inquiry room may have emptied out a bit this afternoon, but that hasn't affected the intermittent level of noise in here.

We're onto the topic of mediation now, including an email from August 2013 in which Paula Vennells wrote that "the hope" of the scheme "was to avoid or minimise compensation".

Another document from February 2014 says Vennells felt suggested sums of up to £50m worth of compensation were "a long way from the figures ... in mind when the scheme was established, which were much smaller and more of the nature of a 'token' with an apology".

Beer suggests this sounds as though sub-postmasters were welcome to the scheme "in so long as they had a pat on the head and a token payment when they left". Vennells agrees that's what it looks like, but insists this wasn't her view of the situation at the time.

The laughs in the audience are loud, as they were yesterday towards the end of the hearing. But Vennells seems more able today to tune such reactions out.

Beer moves on to a note about a meeting with Second Sight in February 2014, in which Vennells said the cost of sub-postmaster's claims had been projected to cost around £100m.

Second Sight responded by saying their rough calculation was around £25m to £50m.

Vennells observed that this was a "long way from the figures that were in mind when the scheme was established, which were much smaller".

Beer asks whether she had wanted to minimise cost to the business. Vennells replies she had a responsibility to manage budgets and this information was shared with the board.

Asked whether she wanted to give at most a "meagre sum and apology" to sub-postmasters without really understanding or investigating the cause of their problems, she denies this.

After a short break, the inquiry resumes and is now looking at an email Vennells sent to former Post Office secretary Alwen Lyons and Susan Crichton, former general counsel for the Post Office.

In this email, Vennells tells Crichton she'd read the mediation pack - which stated compensation could be an outcome - for mediation scheme application - but that "when we discussed this, the hope of mediation was to avoid or minimise compensation".

Beer asks whether it was Vennells' view that mediation was there to avoid paying compensation.

Vennells denies this, saying she thought it would lead to a "resolution" between the Post Office and sub-postmasters.

Beer presses on this, asking why the email mentions minimising compensation, to which Vennells says that "clearly" there must have been concerns about potentially paying out major compensation if it wasn't due.

"What you're saying here is that we've got a private hope of paying out nothing, the document we're giving to sub-postmasters doesn't tell them that," Beers puts to her.

Vennells pauses for a long time and finally says "well clearly I am saying that" but says it wasn't a "private hope".

Watch inquiry counsel Jason Beer KC grill Paula Vennells about whether she was trying to stop the Post Office board from learning about the executive team's "dirty laundry".

You can find our full post on the exchange here.

Beer takes Vennells back to the unsafe convictions figure from Susan Crichton's report, asking her to clarify whether the board knew by mid-July 2013 there was a risk around 5% of prosecutions needed disclosure of additional evidence which could lead to appeals in the criminal court.

Vennells confirms they did, at which point Beer asks her whether she was concerned at the number of cases or did she regard it as not significant?

Vennells says this was an extremely serious matter and she was relying heavily at the time on the legal team to lead and advise.

After emphasising any wrongful prosecution would have been unacceptable, she says while external lawyers said the number of unsafe convictions was likely to be 5%, they also expressed the view it could be lower.

Asked how the board reacted, Vennells says she doesn't recall and that she's not sure how much of Crichton's paper the meeting got through.

She adds the chair possibly thought of bringing her into the meeting at some point but that the board ran out of time.

Beer goes on to ask Vennells whether she agrees that the Post Office's executive team, which she led, shielded the board from the company's "dirty laundry".

"I'd say it was completely wrong," Vennells replies.

Beer continues that there is a suggestion the executive team could manage problems away, but if the board were to know about these problems they'd need to disclose them to sub-postmasters, Parliament, and the public.

"I feel very strongly about that," says Vennells, "because one of the elements that was so important to me was to have the board challenge [me]".

Beer continues to press Vennells on why she presented Crichton's paper to the board.

"I would not cover anything up in this process," she says.

Vennells points out that Crichton's paper said only 5% of prosecutions may end up as successful claims for wrongful prosecutions.

"I never once withheld information from the board," she adds.

She goes on to deny trying to prevent the board from hearing directly from Crichton.

"Did you take over her paper and present it or the issues in it to prevent the board from hearing her opinion?" Beer asks.

"No, I've told you exactly what happened, which is I was expecting her to come in and, minutes before that should have happened, the chairman told me she had decided to stand Susan down," Vennells says.

Vennels is now being asked about presenting Susan Crichton's board paper for her.

"She was made to wait outside on a chair ..." Beer says.

"Yes, and I felt bad about that," Vennells interjects.

"Sitting there like a naughty schoolgirl?" Beer adds, to which Vennells says says "yes, and she must have felt terrible".

Vennells says she did not present her paper but "asked the board whether they had questions" about it and that there was no formal presentation of the paper.

"Crichton has told us in this inquiry that she spoke to you before the meeting to say that, in her view, there would be many successful claims against the Post Office arising from past wrongful prosecutions," Beer says, asking whether it was true.

"I have no recollection of that whatsover," Vennells says.

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Beer is continuing to look at the notes about the July 2013 meeting, in which the board expressed strong views that the Post Office hadn't managed the Second Sight review well.

He asks Vennells if she had considered relieving Susan Crichton of her duties as the company's top lawyer over the review's handling.

She says she can't recall, adding that she thought Crichton was the "right person" to lead it going forward.

Beer presses Vennells on this point, asking why she thought the independence of the review made for good governance.

Vennells says it was a "very unusual situation" where Second Sight came in and people on the board didn't understand the complexities of bodies and MPs involved.

"Their view was this should've been straightforward," she adds.

When I spoke to former sub-postmaster Lee Castleton earlier, he said how good it was to see people in the inquiry room focusing on the screens displaying key paperwork and correspondence.

"The more in tune that people become to what's been written at the time is more important to the outcome of this," he told me, "because it really is about the attitude and the writings of the time".

In front of me now, rows of people watching Paula Vennells' evidence are doing just that, as she's taken through minutes from a Post Office board meeting on 16 July 2013 - a week after the Second Sight interim report about Horizon was published.

In the minutes, it's stated that the board had grown "concerned that the review opened the business up to claims of wrongful prosecution".

Asked what this refers to, Vennells says she can't recall this being discussed at the meeting or who'd come to that conclusion.

More than a few people have stopped looking at the screens above them now and have turned to the person next to them to make their own observations. One woman goes as far as letting out a loud groan.

Beer pulls up a report prepared by former Post Office head lawyer Susan Crichton for a board meeting in July 2013, highlighting points stating the company was taking a "pro-active" approach to their relationship with sub-postmasters and a "reactive" approach to criminal cases.

He asks her to explain why a pro-active approach was being taken to managing relations with sub-postmasters but a sitting-back approach to miscarriages of justice?

Vennells replies she can't comment on the criminal or legal side of things because she is not a lawyer.

She says that this was Crichton's recommendation, adding that her own recollection was criminal cases had to go through the Court of Appeal to be resolved.

That doesn't tell you anything about what the organisation responsible for prosecutions should itself do to allow the Court of Appeal to fulfil that role, Beer notes.

Vennells agrees, but says she and the board had been advised by Post Office lawyers this was the right approach.

"It was clearly completely wrong to put criminal cases into a mediation scheme that couldn't have resolved it," she says.