19 June 2024 – Richard Christou and Duncan Tait — Searchable transcripts of the Post Office Horizon IT Inquiry hearings documentation (2024)

Questioned by Mr Stevens

Mr Stevens: Please could you state your full name?

Richard Christou: Richard Christou.

Mr Stevens: Mr Christou, thank you very much for attending the Inquiry today and thank you for the two witness statements you have provided. I want to turn to those first. You should have a bundle of documents in front of you. Could I ask you to open that and have the first witness statement in front of you.

Richard Christou: I do.

Mr Stevens: Thank you. Is that dated 20 March 2023?

Richard Christou: Yes.

Mr Stevens: For the record, that has Unique Reference Number WITN03840100. Could I ask you please to turn to page 29.

Richard Christou: Yes.

Mr Stevens: Is that your signature?

Richard Christou: It is.

Mr Stevens: Could I ask you then to turn to your second witness statement, dated 9 May 2024.

Richard Christou: Yes.

Mr Stevens: For the record, that is reference number WITN03840200. Now, before I ask to turn to your signature, there’s one correction I believe you want to make –

Richard Christou: Yes.

Mr Stevens: – which is at page – bear with me sorry – page 21, paragraph 103.

Richard Christou: That’s correct.

Mr Stevens: I’ll just wait for that to come up on the display. There we are. So, as I understand it, it’s the last sentence of paragraph 103 and the correction should be in schedule A02 to change the paragraph number to 4.1.8.

Richard Christou: That’s correct.

Mr Stevens: Is it the same for schedule A4?

Richard Christou: Yes.

Mr Stevens: Thank you. With that correction in mind, could I ask you please to turn to page 27 of your statement.

Richard Christou: The second witness statement?

Mr Stevens: The second witness statement, sorry, yes, thank you.

Richard Christou: Yes?

Mr Stevens: Is that your signature?

Richard Christou: Yes.

Mr Stevens: Are the contents of both of those statements taken together true to the best of your knowledge and belief?

Richard Christou: Yes.

Mr Stevens: Thank you very much. Now, those witness statements now stand as evidence in the Inquiry. They will be published on the website in due course. I have some questions for you about them but not all issues that you raise within them. I want to look at an exhibit in your witness statement first, if I may, and that’s – if we can bring up the first statement, please, and page 30.

Richard Christou: I’m looking at the wrong statement.

Mr Stevens: Yes, it will be on the screen shortly, as well. So this is a CV that you’ve annexed to your witness statement. If we could go to the bottom of the page, please, we see that you qualified as a solicitor in 1969 –

Richard Christou: Yes.

Mr Stevens: – and, thereafter, from 1970 to 1990, you held various roles in the companies listed in the middle column.

Richard Christou: Yes.

Mr Stevens: Now, of those roles were you acting as an in-house solicitor for – where it says legal adviser, is that akin to in-house solicitor?

Richard Christou: Yes.

Mr Stevens: We see from 1982, the two roles you had with, first with STC Telecommunications and then with Solaglas (UK) Limited you acted as company secretary?

Richard Christou: That’s correct.

Mr Stevens: Finally, from 1987 to 1990, it says, “Director, Commercial & Legal Affairs” of STC Plc. Did you sit on the Board of that company?

Richard Christou: No, it was what I described as a courtesy title.

Mr Stevens: I want to now look at your roles from 1990 onwards, and from that point you worked within the ICL Group?

Richard Christou: Yes.

Mr Stevens: When you joined in 1990, I understand that Fujitsu – I’ll just use the single term without going into the precise legal entities – was a majority shareholder in the ICL Group?

Richard Christou: Yes.

Mr Stevens: ICL, at that time, continued to have its own branding as ICL –

Richard Christou: Correct.

Mr Stevens: – but, in 2002, the brand changed from ICL to Fujitsu?

Richard Christou: Yes.

Mr Stevens: Could we look, please, in your second statement at page 3, paragraph 10.

Richard Christou: Yes.

Mr Stevens: So it’s been some time since the Inquiry has considered the corporate structure for Fujitsu, so I think it’s helpful to go over it. You helpfully here set out the key or relevant companies within the ICL Group, at paragraphs (a) to (e), on the left, with the name before the change of brand in 2002, and, on the right, when it became a Fujitsu-branded company?

Richard Christou: That’s correct, yes.

Mr Stevens: So at the top of the corporate pyramid, as it were, we have ICL Plc, which was the ultimate holding company for the group?

Richard Christou: Yes.

Mr Stevens: We see that became Fujitsu Services Holdings Plc in 2002.

Richard Christou: Yes.

Mr Stevens: Beneath that (b) there’s International Computers Limited, which was a wholly-owned subsidiary of ICL Plc?

Richard Christou: Correct.

Mr Stevens: International Computers Limited carried out ICL Group’s UK operations; is that right?

Richard Christou: That’s correct, yes.

Mr Stevens: That became Fujitsu Services Limited –

Richard Christou: Yes.

Mr Stevens: – which from roughly 2002 onwards it became the contracting party for the Horizon contract?

Richard Christou: Yeah, precisely in April 2003 is when the change was made but, yes, now it is, yes.

Mr Stevens: Yes, 2003, sorry, you’re quite right. What we see at (c) is ICL Pathway Limited. Now, Pathway, when the Horizon Programme was being tendered for, it was referred to as the Pathway Programme?

Richard Christou: Yes.

Mr Stevens: ICL Pathway Limited was set up as a company in order to tender for and deal with the Pathway Programme?

Richard Christou: Yes, yes, that’s correct.

Mr Stevens: That, in itself, was a wholly-owned subsidiary of International Computers Limited?

Richard Christou: It started off as a consortium, there were two other shareholders. From recollection, it was Girobank and De La Rue but, shortly after, I think about a year after – 1996 maybe – ICL and the other two consortium members parted company quite amicably and it then became a wholly-owned subsidiary of ICL – sorry, of International Computers Limited.

Mr Stevens: I think you’re quite right, the De La Rue and Girobank consortium was of sort of historic interest –

Richard Christou: Historic.

Mr Stevens: – for being a PFI deal, initially. For today’s purposes, from 1996 onwards, wholly owned by ICL –

Richard Christou: Correct.

Mr Stevens: – International Computers Limited?

Richard Christou: Correct.

Mr Stevens: Thank you. The final company we see there is (d), the ICL Global Investments Limited. Now, I understand that that was a subsidiary of the overall parent company ICL Plc?

Richard Christou: That’s correct.

Mr Stevens: ICL Global Investments Limited dealt with the ICL Group’s non-UK business?

Richard Christou: That’s correct.

Mr Stevens: Let’s turn, then, to look at your roles. You were appointed as Director of Commercial and Legal Affairs of International Computers Limited in 1990?

Richard Christou: Yes.

Mr Stevens: We don’t need to turn it up but, in your first witness statement, paragraph 5, page 2, you say that you were responsible for the provision of legal and commercial advice in connection with the participation of the ICL Group in the tender for the Horizon IT System.

Richard Christou: Yes, that’s correct.

Mr Stevens: So, in that role, and when dealing with the tendering process and the Horizon IT System, which teams reported to you?

Richard Christou: Only legal personnel, no other persons at that stage. There would have been some commercial people as well but that’s all. There were no operational people reporting to me at all.

Mr Stevens: Do you recall who operational people reported to?

Richard Christou: They would have reported either directly or indirectly, and I think directly, to Keith Todd at that stage.

Mr Stevens: Could you explain where Keith Todd sat in relation to you in the management structure?

Richard Christou: I reported to Keith Todd. He was the Chief Executive.

Mr Stevens: Now, at that stage, were you part of any management or Executive Committee this within ICL – sorry International Computers Limited?

Richard Christou: There was a Fujitsu – sorry, it would have been ICL at that stage – ICL Management Committee, I suppose you’d call it – which met once a week, and we – all of the reports of the Chief Executive would sit round the table and you’d discuss whatever matters came up.

Mr Stevens: For the purposes of those management committees, was there a hard line difference between, say, ICL Plc and International Computers Limited?

Richard Christou: I don’t think people thought of it like that.

(Pause for fire alarm test)

Mr Stevens: I say with trepidation that I think that’s the end of it.

Richard Christou: We can carry on.

Mr Stevens: Just for clarity, I was asking you about management committees.

Richard Christou: Right.

Mr Stevens: The question I asked before we had the fire alarm was: was there a hard line difference between the management committees of, say, ICL Plc and International Computers Limited?

Richard Christou: As I said, I don’t think people thought of it like that. If you look at the composition of that management committee, the people on it, of which I was one, were probably called director of this and director of that but none of them, except the Chief Executive, was on the Board of ICL Plc. So, in that sense, yes, there was a hard line, I suppose you could call it a hard line, between them. But whatever went on there, it was the Chief Executive’s job, in due course, as a member of the Board to produce his report to the Board.

Mr Stevens: So in your role you would attend the Management Committee –

Richard Christou: Yes.

Mr Stevens: – every week. You weren’t a member of the Board of ICL Plc –

Richard Christou: No.

Mr Stevens: – but would you be asked to attend on occasion?

Richard Christou: I actually can’t recall an occasion when I was asked to attend.

Mr Stevens: I’ve asked there about management committees of ICL Plc and International Computers Limited; what about ICL Pathway Limited: did that have a separate management structure?

Richard Christou: That had a separate management structure because, obviously, it was originally set up as a consortium agreement. They had their Board, and it was managed, I suppose, quite a lot in the early stages, via the Board. The Chief Executive would report to that Board but, in practice, the Chief Executive reported to – well, he was called Managing Director – reported to the Chief Executive of ICL, who would have been Keith Todd.

Mr Stevens: So would that mean the Managing Director of ICL Pathway Limited came to the Management Committee meetings which you attended for ICL – sorry, International Computers Limited?

Richard Christou: Frankly speaking, I can’t recall but I don’t think so. But I don’t recall actually seeing him at a meeting.

Mr Stevens: Whilst you were in your position as Director of Legal and Commercial, did you attend the Board meetings of ICL Pathway Limited?

Richard Christou: Yes, I did.

Mr Stevens: Can you recall who else attended those Board meetings, in particular who from an IT background or an operational background attended?

Richard Christou: Let’s think. The only one that springs to mind – well, of course, there was the Managing Director of Pathway, who was then Mr Bennett, I think Mr Coombs attended as well. I don’t recall any other operational people. Mostly, it was the Board originally, with some of the representatives of Girobank and De La Rue, and they actually stopped on for some time afterwards because there were subcontracts with them.

Mr Stevens: Let’s turn then to your – before I do that actually, I should say, in your first statement, you go into, as requested by the Inquiry – an amount of detail in relation to the Benefits Agency withdrawing from the agreement. Those are Phase 2 issues that I don’t propose to cover with you today.

Richard Christou: Right.

Mr Stevens: You became Acting Chief Executive and, shortly after, Chief Executive of ICL Plc in 2000?

Richard Christou: That’s correct, yes.

Mr Stevens: Whilst you were Chief Executive, I understand you were also a director of International Computers Limited?

Richard Christou: When I was Chief Executive, I would have been a director of ICL Plc in that sense. I mean, nobody really looked at International Computers Limited as a separate company, whether it’s correct or not, it was, if you like, all mixed together and the Board that, if you like, was controlling the whole thing was the Board of ICL Plc and yes, I would have sat on that when I was Chief Executive as a Board member.

Mr Stevens: In terms of the responsibility for overseeing the Horizon IT System, at the time when you became Chief Executive in 2000 at Board level, was that a responsibility of ICL Pathway Limited, ICL Plc or both?

Richard Christou: I think at different levels it was both because, clearly, ICL Pathway was executing the contract and looking at it on a – obviously, a day-to-day basis, hourly, probably. But ICL Plc, obviously, as the ultimate Board had responsible for the whole business, including Pathway – or Horizon, I’m sorry.

Mr Stevens: This is quite a broad question but would you say that the identification, analysis and management of risk is important to the running of a company?

Richard Christou: Of course it is.

Mr Stevens: Would you accept that ICL Plc or the Board of ICL Plc was responsible for overseeing how the Group or the company, either ICL Plc or ICL Pathway Limited, identified, analysed and managed risk?

Richard Christou: Only in the broadest sense.

Mr Stevens: Can you expand on that, please?

Richard Christou: Yes, sure. If you look at a company the size of this, it is not possible for every level of detail to be surfaced to the Board. If every single document about every single contract was surfaced to the Board, they would not have time or capacity to understand it or to consider it, even. So what is necessary is a filter system, whereby overall the Board has to be satisfied – and this is what I’ve described in the second witness statement, that there are flows of information in place but one has to manage by exception, and people further down in the organisation – in this case the Managing Director and the other responsible people in Pathway – had to deal with day-to-day matters.

And levels of a certain granularity, complexity, would not come to the Board. The Board would have certain reports and they would be satisfied with the overall conduct of the business but precise details, no.

Mr Stevens: The filters you’ve described, presumably the purpose of those is to ensure that any serious matters that ought to have the attention of the board, either of ICL Pathway Limited or ICL Plc, ensure that those significant issues make it to the Board?

Richard Christou: Yes, I think that’s correct. I’m saying ensure they reached the Board provided people further down operate the system properly, then they will reach the board. They were issues that were serious – in my second witness statement, I refer to the red alert system – and those things did come to the Board. So details, certain details, would not have come to the Board because they were too complex, technical and too detailed.

Mr Stevens: Would you accept that, as Chief Executive, you had a responsibility to exercise care to see that those filters were working properly and people in lower down executive levels were filtering information up appropriately?

Richard Christou: I’d accept that I had responsibility to set up the systems, a lot of those systems were already set up before I became Chief Executive. One has to delegate and delegation in the organisation requires that people further down make those decisions. It’s necessary to see that appropriate personnel are appointed and, at various levels, that is always done. I should point out that all of our employees are required, through the HR system, to go through assessments as to capability, et cetera, et cetera, on a regular basis and these are filtered up and, if there were any concerns about the competence of a person, the next level of management would have dealt with it.

So I think, overall, I’m responsible – and I accept that – for setting up the systems but it’s people lower down in the organisation who have to operate them.

Mr Stevens: That’s talking about responsibility for ensuring things are working. I want to ask a slightly different question about accountability. Would you accept that, as Chief Executive, you were ultimately accountable for the operations of the ICL Group?

Richard Christou: I don’t accept that. That’s too broad.

Mr Stevens: In terms of your accountability then, for the ICL Group and its operations, what would you say your level of accountability was?

Richard Christou: What I was responsible for was that, as so far as possible, to see that the operations of ICL were carried out legally, were carried out profitably and to report to my shareholders, Fujitsu Limited, various issues insofar as it was necessary.

If you mean that I was responsible for the miscarriage of justice then I don’t accept that. It’s not to mitigate the miscarriage of justice, I hasten to add, I think it’s a gross miscarriage of justice, I really feel for the subpostmasters and the postmasters who are involved, but talking about accountability is a different matter and, certainly, I knew nothing about it.

Mr Stevens: We’ll come back to specific facts as we go. Before moving on to look at the restructure, I just want to ask, when you were Chief Executive, who did you report to?

Richard Christou: I will first have – well, apart from the Board, in actual fact, I reported to a Mr Naruto in Tokyo, he was a very senior member of the IC – sorry, Fujitsu Limited Board, and he was the person who oversaw the purchase of ICL by Fujitsu in 1990. After that, I reported to a Mr Kurokawa, who was later president of Fujitsu, and I reported to him for a long time, and following that I would have reported to the next president and the next president.

Mr Stevens: In terms of as Chief Executive, your reporting lines, who reported to you directly, who had responsibility for the oversight of the Horizon IT System?

Richard Christou: Very initially, and I’m talking about the 2000, Mike Stares, I presume, would have reported – he reported to me. From July 2001, a Chief Operations Officer, Mr David Courtley, was appointed and, from then on, he was responsible for all of the operations within ICL, as it was then, and all of the operation departments, including Pathway, reported to him; he reported to me.

I kept the functional departments at that time, so things like HR, Marketing and Legal.

Mr Stevens: We, actually, I’ll go slightly out of order, on the matter of Mr Courtley. In April 2004, you became Executive Chairman of what was then Fujitsu Services Holdings Plc but had been ICL Plc?

Richard Christou: That’s correct, and he became Chief Executive.

Mr Stevens: Now, you remained employed by the company on a full-time basis, I understand?

Richard Christou: Yes, that’s why they called it “executive”. I mean, we know it has no legal significance, you’re Chairman or you’re not Chairman, but that’s what Fujitsu wanted to use because that’s what they thought it meant.

Mr Stevens: Did your responsibilities change upon becoming Chairman?

Richard Christou: Yes. They were much more focused outward, dealing, for instance, with particular customers, a lot of them overseas, because Mr Courtley had his hands full, reorganising and dealing with the operating divisions within what was then International Computers Limited.

So, to give you a small example, I went with the president to Russia at one stage to look at their operations there; I went to Finland; a bit later on, I was on some Boards of Fujitsu America; and so on. I mean the role grew, much more widely.

Mr Stevens: The functional elements that you said you kept when Mr David Courtley became Chief Operating Officer in July 2002, did you pass those functions down to Mr Courtley –

Richard Christou: Yes.

Mr Stevens: Yeah.

Richard Christou: Sorry, I shouldn’t cut you off. Yes, the answer is.

Mr Stevens: I was going to say when you became Executive Chair?

Richard Christou: Yes, yes, exactly.

Mr Stevens: What was your working relationship like with Mr Courtley?

Richard Christou: Very good. I’d known him for some time, actually. He worked previously for EDS and we first came across each other in a kind of contract dispute, as it happens, between ICL and EDS, and we had a great mutual respect. I thought he was a – first of all, he was more of a technician than I. He actually had a degree in mathematics. That’s what you got in those days if you were going to be a computer scientist. So he was much more technically oriented than me and he was also what I’d describe as better at growing the business than me.

I was, if you like, clinical and the turnaround I did in ICL, during those first years, was something that needed a really clinical, objective view of the issues. He was concerned much more with growing the business and this was one of the reasons why he was employed.

We had our offices next door to each other. We’d have coffee together and chat. If there was anything that was concerning him, he would have raised it with me.

Mr Stevens: You say in your witness statement you had regular weekly meetings with all your direct reports, including Mr Courtley?

Richard Christou: Yes, yes.

Mr Stevens: Did that continue when you were Executive Chairman?

Richard Christou: No, not in the same way. I would have had – the weekly meetings I would have had would have been with Mr Courtley and with the functional people. But not with the operational people underneath, that was for Mr Courtley to deal with, including Horizon.

Mr Stevens: Aside from the matters that you raise in your witness statement, such as various red and amber alerts, can you recall Mr Courtley expressing any concerns to you as to the adequacy of the Horizon IT System?

Richard Christou: No.

Mr Stevens: I want to look at the restructure now, it’s jumping back, I appreciate. Please could we bring up FUJ00003693.

Richard Christou: Yeah.

Mr Stevens: This is set of minutes for ICL Pathway Limited –

Richard Christou: Yes.

Mr Stevens: – so the specific company, 15 August 2000?

Richard Christou: Mm-hm.

Mr Stevens: At this time you were Acting Chief Executive, I believe?

Richard Christou: That’s correct. That – just about, yes.

Mr Stevens: We see you are chairing the meeting.

Richard Christou: Mm.

Mr Stevens: If we go down slightly, further down, please. Thank you.

Sir, I should just say, at this point, when looking at minutes, you may see the Post Office highlighted at various points – you’ll see it there – that wasn’t on the original minutes. That’s something that’s added afterwards.

Richard Christou: Okay.

Mr Stevens: So just a point of clarification.

Richard Christou: Yeah.

Mr Stevens: So you’ve got various things of headcount requirements for testing, and then we have the Managing Director’s report.

Richard Christou: Mm.

Mr Stevens: Go over the page, please. We see there quite a detailed report from the Managing Director –

Richard Christou: Yes, yes.

Mr Stevens: – on various parts.

Richard Christou: Yes.

Mr Stevens: (b) CSR+ – that’s Core Systems Release Plus – was a significant issue?

Richard Christou: Yes.

Mr Stevens: It provides detail; (c) we have detail on the rollout; and (d), weekly service performance is still a key issue.

Richard Christou: Mm.

Mr Stevens: Was this typical of the type of oversight that the Board of ICL Pathway Limited would give to the delivery of the Horizon contract?

Richard Christou: Yes, I think that’s – yes, I mean, obviously, it varies with time but this is the sort of report that we got, yes.

Mr Stevens: In fairness, this is rollout, so it’s a busy time for the company?

Richard Christou: No more busy than in the development. I think, in a sense, once they got through the acceptance test, which I’m – they would have done by then, I think, rollout is a logistics issue, rather than a – it’s much more straightforward in a sense. There’s a lot of planning to do but it’s a logistics issue, mainly.

Mr Stevens: Can you recall how often the Board of ICL Pathway Limited would meet?

Richard Christou: No.

Mr Stevens: Can we look at your witness statement now, please, page 4, paragraph 15. So you discuss here part of the restructure –

Richard Christou: Yeah.

Mr Stevens: – and say:

“In order to make Board meetings of all three companies more efficient …”

When you say “all three companies” there, you’re referring to the ultimate parent company, Fujitsu Services Holdings, Fujitsu Services Limited, the sort of intermediate company –

Richard Christou: Yes, there’s those two.

Mr Stevens: – and then the other – I think the third company is the one responsible for non-UK business?

Richard Christou: That’s correct. It was all three of those.

Mr Stevens: The Board decide to delegate the oversight of all of the companies to a single management, known as the Fujitsu Services Management Committee?

Richard Christou: That’s correct, it was a Fujitsu Limited decision.

Mr Stevens: When you say Fujitsu Limited, can you just explain the corporate identity of Fujitsu Limited?

Richard Christou: Yes, Fujitsu Limited is the ultimate holding company of Fujitsu. It’s quoted on the Tokyo and, I think, the New York Stock Exchanges. It’s an interesting company because it’s not only a holding company but it also runs all of the operations in Japan as well.

Mr Stevens: Is it incorporated in Japan?

Richard Christou: Oh, yes, yes.

Mr Stevens: So do I understand you to say that this decision was made by that company in Japan not an ICL Group or UK Fujitsu?

Richard Christou: No, no, they – I mean, it’s a practical matter that they wanted to look at the business as a whole, and there are a lot of Japanese directors and observers coming in all the time and to have three separate meetings just wasn’t efficient. So we dealt with everything at one meeting and the meetings would go on all day.

Mr Stevens: So when you discuss efficiency, you’re using it in the sense of the word from the holding company above Fujitsu Services Holdings, their efficiency, really.

Richard Christou: Yeah.

Mr Stevens: – they come in and have fewer meetings?

Richard Christou: Well, yes, but it didn’t impact on the consideration of issues, it was just that we had a very long meeting on one day.

Mr Stevens: Could we just then turn to page 12 of your statement, paragraph 55. Sorry, second statement.

Richard Christou: Yes –

Mr Stevens: For context, in this you’re talking about quarterly business reviews, and you say:

“For a complete set of meetings comprising this cycle [the corporate business review cycle, I think] see the four FSMC [so Fujitsu Services Management Committee] meetings in 2005 …”

So do we take it from that that the plan was for the FSMC to meet four times a year or quarterly?

Richard Christou: That’s correct. It fit in with Fujitsu’s quarterly reporting obligations as a quoted company, and I can expand if you wish but that’s the answer to the question.

Mr Stevens: So the follow-up question I have is: from the perspective of, say, a director on ICL Plc, when this change was made, did it result in fewer Board meetings each year?

Richard Christou: No.

Mr Stevens: So before the change, it was –

Richard Christou: It was exactly – it was following exactly the same schedule from 1990 because, from 1990 onwards, Fujitsu Limited had the same reporting requirements as it did in 2000. In fact, when ICL was taken over, it had to change its accounting year to correspond with the Fujitsu accounting year, so that the system would work. So this is a long-established tradition.

Mr Stevens: That document can come down, please.

Can we please look at FUJ00003704. We see these are minutes of the Fujitsu Services Management Committee on 29 May 2002.

Richard Christou: Yes.

Mr Stevens: In your witness statement, you say that this is the first meeting of the FSMC.

Richard Christou: Yes, because it took place – we switched the brand, if you’ll remember, on 1 April 2002, again to coincide with Fujitsu’s financial year. Everything happens at the beginning of the financial year with Fujitsu, and that was the first meeting that we held.

Mr Stevens: We see that, at this point, that one of the companies included in this isn’t what was ICL Pathway Limited?

Richard Christou: No, that’s correct and it wouldn’t be because it was just an operation, just like a lot of other operations, and you’ve got Mr Courtley there, who is responsible for all those operations. So it wouldn’t be appropriate.

Mr Stevens: If we can go down, please, we see at the bottom we have your CEO report, and you’re talking about the financial year and about the restructuring.

Richard Christou: Yes.

Mr Stevens: If we can go to page 3, please, the CFO report?

Richard Christou: Yes.

Mr Stevens: Just scrolling down, we don’t need to read all of this, but we see quite a detailed report which continues until page 8 –

Richard Christou: Yes.

Mr Stevens: – and we have here Mr Courtley presenting the new organisational model.

Richard Christou: Yes.

Mr Stevens: In terms of the new organisational model, and I’m only really focusing on oversight of Horizon here, what changes were made to the management structure that affected the oversight of the Horizon IT System?

Richard Christou: In actual fact, none at this stage. You see the one that says, “Large projects, reporting direct to Mr Courtley”?

Mr Stevens: Yes.

Richard Christou: Well, one of those large projects was, at that time, Pathway – I’ve forgotten what it would be called now, ICL Pathway Limited, I suppose – and what happened, just to – if I may, to finish it – in 2003, when we entered into the extension agreement, it was agreed with the Post Office that we would shut down the actual Pathway company, it would become dormant, and large projects would then comprise a division within Fujitsu Services Limited, which comprised the Horizon project, and that division became one of the five large projects, each of which had a division, if you like, reporting to Mr Courtley.

Mr Stevens: The only thing, I think, just to clarify there, when you say the “extension”, you mean the extension of the date for termination of –

Richard Christou: Exactly.

Mr Stevens: – the Horizon contract –

Richard Christou: Yes.

Mr Stevens: – and it then extended to 2010?

Richard Christou: Precisely.

Mr Stevens: At this stage then, so we’re in 2002, can you recall what, if any, Board meetings were held by ICL Pathway Limited?

Richard Christou: No, is the answer. I may have attended some but, without you showing me documents at this minute, I don’t recall.

Mr Stevens: Is it fair to say from your perspective at this stage you saw the responsibility as being on Mr Courtley to present any issues with the Horizon project to the FSMC –

Richard Christou: That’s exactly correct.

Mr Stevens: – or that –

Richard Christou: Well, or to me.

Mr Stevens: Or to you in the –

Richard Christou: Yes, and then I would have presented it but that’s correct.

Mr Stevens: That document can come down. Thank you.

Do you think the restructure had any effect on the level of oversight that ICL Pathway, then Fujitsu Services Holdings limited, had on the Horizon IT System?

Richard Christou: I think it would have had a beneficial effect because what you have now is Mr Courtley, who has great experience in IT, he’s much more technically oriented than me, and I believe it would have been, let’s say, a more – more piercing oversight is the word I would use, yes.

Mr Stevens: Before I move on to look at a couple of specific topics, just for the purposes of the timeline, I want to complete your sort of career history. In April 2007, you became Corporate Senior Vice President and Head of Fujitsu EMEA Regional Operations for Fujitsu Limited?

Richard Christou: Yes.

Mr Stevens: So that’s the overall parent company incorporated in Japan?

Richard Christou: Yes.

Mr Stevens: Did you remain a director or involved in Fujitsu Services Limited or Fujitsu Services Holdings Plc?

Richard Christou: I would still, from my recollection, be chairing the FSMC. That’s the limit of it. So, from that stage onward, anything that I really knew about operations within that group of companies would have come via the FSMC meetings.

Mr Stevens: And at that stage, would you have had – sorry, I’ll rephrase that question.

Did Mr Courtley report to you directly or indirectly once you became Corporate Senior Vice President?

Richard Christou: I’m trying to think. I’m thinking very carefully about the answer so I can give it to you. It would have been directly, in a sense. There was still a line but that line would have been fairly tenuous. I mean, at that stage, he was acting like any Managing Director or Chief Executive of a subsidiary, reporting to what I described as a holding company. So there was a line but he was running the business as he saw fit, I had confidence in him and that was it. Yeah.

I was ultimately responsible, I think is the way I will put it, for the way in which he managed the whole of the business but that’s like a normal Chairman of a Board, in my view.

Mr Stevens: What reporting line, if any, did you have to Mr Duncan Tait?

Richard Christou: Duncan Tait was – I’ve got to think about this – I think – and I’m saying I think – that he came on board – he came from Unisys as a director – courtesy title – of I think the commercial business unit in those days, which I think had Pathway in it. He would have reported to David Courtley. So it’s a very indirect line, as far as I’m concerned and, by the time – don’t forget, by the time he came on board, I was practically based in Tokyo. I mean, I went to live in Tokyo in 2010 so, yes, I knew him.

I had a lot of respect for his competence. Mr Courtley left in 2009, I think. There was a short interim period when I just sort of held the reins. I don’t know if – I wouldn’t say I was overseeing anything in particular. I appointed Roger Gilbert for a short time as Chief Executive of what was then Fujitsu Services Limited. We had broken – I’ve got to go back to this, but we broke up the original group once we were reorganising as a global business group and what was there was Fujitsu Services Limited. ICL Plc was – it was a legal entity but it was not really managing, in any sense of the word.

So Duncan Tait was in charge of commercial unit. Pathway was in it. There came a time in 2010 when we wanted to make a more permanent Chief Executive for Fujitsu Services Limited. There were two people who were candidates and about my last executive decision, if you like, was with the consent of Fujitsu Limited, my colleagues on the Board as it would have been in these cases, I appointed Duncan Tait as Chief Executive of Fujitsu Services Limited. That’s 2011.

At that stage, I retired, in effect, because, frankly, at 67 this was becoming a bit too much for me, and I spent a year – Fujitsu Limited tends to give its directors a kind of sabbatical before they retire, is the way it works, and I took my sabbatical in Singapore, I was kind of a corporate executive adviser but I didn’t really do anything much and then I left, returned to England, and that was the end of it.

Sorry, I can stop.

Mr Stevens: Before I –

Richard Christou: Yes?

Mr Stevens: – move on, do you recall at any point Mr Tait advising you of any concerns he had about the Horizon IT System?

Richard Christou: The only connection that I had with him in this issue is the document which you showed me, I can’t remember the name of it, an exchange of emails, in which he wanted to set up –

Mr Stevens: Well, if that’s your only recollection –

Richard Christou: That’s the only – I can’t remember whether it happened or not, to be honest.

Mr Stevens: We’ll come to that shortly.

Richard Christou: Yes, yes. But that’s all. Nothing else.

Mr Stevens: We’re going to move to a different topic now. Can we please bring up your first witness statement, at page 22, paragraph 67, so you write at paragraph 67 that:

“I have been asked whether or not Horizon could be considered a robust system. In all my experience of over 40 years working in the Telecommunications and IT industry I have never across the use of the word ‘robust’ as a contractual term. With respect, I think it is a subjective term without any precise legal meaning. I believe that the only pertinent questions in relation to the Horizon system are, (a) did the system pass the acceptance tests, and (b) was it delivered in accordance with the contract. Both of these conditions were satisfied at the end of rollout in 2002.”

So, effectively, as I understand it, you’re saying, from your perspective, the key questions are: (i) the product produced by Fujitsu and delivered to the Post Office, did it pass the contractual acceptance test?

Richard Christou: Yes.

Mr Stevens: Secondly, in respect of the ongoing obligations, was Fujitsu delivering those in accordance with the contractual standards that had been agreed between the parties?

Richard Christou: Yes.

Mr Stevens: Could we please look at page 26, paragraph 79. You say:

“My objectives in negotiating the Codified Agreement …”

Now, pausing there, the Codified Agreement was the agreement entered into between Post Office – then Post Office Counters Limited – and ICL Pathway Limited in 1999?

Richard Christou: Yes.

Mr Stevens: So the objectives in negotiating that were:

“… to create a detailed specification and precise acceptance criteria.”

When you say “detailed specification”, is that referring to a specification of the services that ICL Pathway were to provide to Post Office?

Richard Christou: That specification that I was focusing on was a specification of the system.

Mr Stevens: Okay. So –

Richard Christou: Because that’s what’s passing the acceptance tests.

Mr Stevens: So, when we’re seeing a detailed specification, is that referring to a set of contractual clauses that set out the specification for the system that ICL were supposed to deliver to Post Office under the contract?

Richard Christou: Yes, it was in a schedule to the Codified Agreement.

Mr Stevens: You say you:

“… focused on the main provisions of the Codified Agreement, in order to achieve the above objectives. I had little involvement in the preparation of the schedules and appendices of the Codified Agreement, which I never read.”

Richard Christou: Yes.

Mr Stevens: I want to look at the Codified Agreement now.

Richard Christou: Okay.

Mr Stevens: It’s FUJ00000071. This is a document of over 900 pages, so it may be we need to catch up a little bit with the computer system but this is the Codified Agreement. Can we turn to page 12, please.

Sir Wyn Williams: I’m sorry, what’s the reference for that again: 71 at the end? Thank you.

Mr Stevens: Yes, FUJ00000071.

Sir Wyn Williams: Thanks.

Mr Stevens: If we could go to clause 102.1, please. So that’s an interpretation clause, which is standard in these contracts.

Richard Christou: Yes, yeah.

Mr Stevens: It says:

“As used in this Codified Agreement:

“the terms and expressions set out in Schedule A1 shall have the meanings ascribed [to them] …”

Richard Christou: Yes.

Mr Stevens: As is standard, for example, at 103.3, we see – no, sorry –

Richard Christou: Which one?

Mr Stevens: Sorry, if we could go up slightly. I misspoke, sorry. 101.3.

Richard Christou: Sorry.

Mr Stevens: We see defined terms, as is standard, are capitalised, so things like Contractor –

Richard Christou: I’m sorry, I’m lost here. Just tell me again?

Mr Stevens: I’m so sorry. It’s 103.3 (sic).

Richard Christou: I’m not seeing that on the screen.

Mr Stevens: Ah, right. 101.3, I’ve done the same again.

Richard Christou: You want me to look at 101.3?

Mr Stevens: 101.3, yes?

Richard Christou: Okay.

Mr Stevens: Can you see that now?

Richard Christou: Yes, now I can, yes.

Mr Stevens: It would help if I said the right clause. That would be of assistance.

For example, it says “The Contractor”, capitalised, and, throughout this agreement, defined terms tend to be capitalised –

Richard Christou: Yes.

Mr Stevens: – as standard.

Richard Christou: Yes.

Mr Stevens: So, in order to understand this agreement, you would presumably accept that you need to be familiar with Schedule A1?

Richard Christou: This is the interpretations?

Mr Stevens: Yes.

Richard Christou: Yes.

Mr Stevens: So –

Richard Christou: In that sense, I did read it, yes.

Mr Stevens: I was going to say, putting yourself back, whilst you may not have been au fait with everything in the schedules you well have had some familiarity?

Richard Christou: That’s fine but I’m talking about the whole 900 pages.

Mr Stevens: Yes, of course. Could we go, please, to page 17. If we could go down to the bottom there. Thank you. We have “Part 2: Performance of [Post Office Counters Limited] Services and Supply of Products”. Clause 201.2 says this:

“Subject to clause 201.6 the Contractor shall be responsible for meeting the requirements specified in schedule A15 in accordance with the Solutions specified in Schedule A16 by performing the Core System Services referred to in Clause 201.3.”

So, breaking that down, what we have here is, firstly, there was a schedule A15, which set out Post Office, it says, requirements for the contract.

Richard Christou: Well, those particular specifications with the solutions specified, yes.

Mr Stevens: Yes.

Richard Christou: Mm.

Mr Stevens: There were solutions specified, as you say, in schedule A16?

Richard Christou: Yes.

Mr Stevens: Now, when you were involved in the negotiation and the tender, would you have been involved in considering the requirements and solutions for the products?

Richard Christou: No.

Mr Stevens: The clause here then says that, in order to meet the requirements, ICL Pathway had to perform the Core System Services referred to in Clause 201.3. So, if we could look at 201.3, please, which is on the next page. Thank you:

“Subject to Clause 201.6 the Contractor shall perform the following Core System Services in accordance with all applicable provisions hereof …”

So this is essentially setting out what ICL is supposed to do under the contract –

Richard Christou: Yes.

Mr Stevens: – or part of it, I should say?

Richard Christou: Part of it, yes.

Mr Stevens: So this is a very important clause in the contract; would you agree?

Richard Christou: Yes. Yeah.

Mr Stevens: Would you agree that it’s fundamental to the specification of the product and services to be provided?

Richard Christou: Well, it describes what they are and then you have to look at the definition. So I suppose so, yes.

Mr Stevens: We’ll look at two of them. Paragraph 201.3.1 says that ICL were to provide the development services pursuant to clause 403 –

Richard Christou: Yes.

Mr Stevens: – and 201.3.3, also the operational services pursuant to clause 405.

Can we look, please, at page 26, and go to clause 403. So this is the clause that defines the development services?

Richard Christou: Yes, yes, yes, and it has loads of schedules attached to it, so far as I can see, which would give you the specification of the development.

Mr Stevens: Yes.

Richard Christou: Yes.

Mr Stevens: At 403.2, it says, “development of EPOSS”, that refers to the Electronic Point of Sale System –

Richard Christou: Yes, yes.

Mr Stevens: – “as described in the Schedule F1”.

Richard Christou: Yes.

Mr Stevens: Then if we can go over the page, I think, to clause 405, we have the “Performance of Operational Services”, and it says:

“Subject to the Release Authorisation Board authorising commencement of National Rollout of the Core System and subject to Clause 201.6, the Contractor shall, from the date of [Core System Release] Acceptance, perform the following operational Services.”

Now, these obligations effectively kick in after acceptance?

Richard Christou: Yes, after acceptance, and the way I think of these are service provision and service provision obviously can’t start until you’ve got something rolled out that you can provide the service for. So it develops progressively as rollout takes place. Yes, yes.

Mr Stevens: You say that you were involved in drafting precise acceptance criteria for the –

Richard Christou: When I say I was involved, what I was involved in was ensuring that the technical people actually did it because one of the biggest failings in IT contracts is, when they come down to it, they end up without a specification and without acceptance criteria, I was taught this from 1975.

Mr Stevens: As part of that, you would have presumably needed to review the contract and see what services or what specification was being agreed?

Richard Christou: No. It’s not something that I would have looked at because this was dealt with by people who were responsible providing it, and they will produce the necessary services. I wouldn’t want to go beyond what’s in clause 405, and even that needed input from, if you like, technical people who knew what to write in clause 405. What I was concerned with was that it happened, not with its content, and I wouldn’t pretend to be competent to criticise that content.

Mr Stevens: So is your evidence that, in terms of internal lawyers within ICL at this point, was – well, I won’t say “is your evidence”, I’ll ask you. In terms of internal lawyers within ICL at this point, were there any lawyers, that you’re aware of, who were monitoring or reading what was in the schedules?

Richard Christou: This would have been done by Masons. I’m sorry if we are – they’re now Pinsent Masons, I think. These were long-time solicitors. First of all, for STC, actually, I knew them, and there was a person called Iain Monaghan who was the head of a team of lawyers who was looking at all of this and working with the technical people. It wasn’t done by lawyers within ICL, as it was in those days, I suppose, but it was done by a properly qualified Legal Team and Masons were expert in dealing with IT matters. I used them on many occasions.

Mr Stevens: But, presumably, someone within ICL would want to know precisely the nature of the obligations that ICL was signing up to?

Richard Christou: Of course they would but they will be the technical people who would then consult on the drafting with Masons.

Mr Stevens: So your evidence is, in terms of the lawyers, the lawyers wouldn’t have read the schedule F1 –

Richard Christou: No, no, I’m not saying the lawyers wouldn’t. Masons would have done, people in Masons. They had a whole team, and they would have worked with the technical people in ICL. I was there with Stuart Sweetman to oversee that things happened and to look at any real points of conflict in the main agreement, and I don’t think there were very many, actually.

Mr Stevens: Well, let’s look at schedule F01, it’s page 587. So this is the “EPOSS Service Definition” to which those clauses we just looked at referred.

Richard Christou: Yes.

Mr Stevens: It says:

“This schedule details all the requirements relating to the EPOS Service which the Contractor shall provide.”

Richard Christou: Yes.

Mr Stevens: So your evidence is, as I understand it, that – did you not consider this to be a document that someone internal to ICL or a lawyer internal to ICL would need to read to understand the specification of the product that was being provided?

Richard Christou: The point is that there had to be competent legal advice surrounding it. This was done by Masons and it was done in accordance with what the technical people were negotiating on both sides, Post Office and ICL. So what would happen is there would be a lot of technical discussions, they would be writing it and Masons would look at this and turn it into, if necessary, rather more legal wording. But, at the end of the day, the substance which is provided in these schedules has to come from the technical people on both sides, this is how they worked it out, and there’s nothing that I could personally add to that.

Mr Stevens: If you look down we see “Scope”, and then it sets out the four service boundaries. Further down, please, it says, “Constraints”, and we’ve got various paragraphs there. We see, in the brackets, “R808” referring to the requirements which we went to earlier?

Richard Christou: Yeah.

Mr Stevens: Can we go, I think, it’s two pages, I think there may be a blank page on the next page. Thank you. Just further down, please. 3.8 says:

“EPOSS shall be a robust” –

Richard Christou: Ah, well, there you are.

Mr Stevens: – “POCL Service, including features to”, and then it goes on to set that out.

Richard Christou: Well, it’s quite clear that I never saw that and I can’t comment further.

Mr Stevens: Is your evidence that the – well, let me ask it another way.

What was your understanding of the adequacy of the – or let me rephrase, sorry.

What was your understanding of what Fujitsu were required to provide to Post Office in terms of the adequacy of the EPOSS product?

Richard Christou: I don’t think I had any particular understanding, I know what an EPOS product, is, point of sale, basically. I had assumed there would be a specification for it and that it would be supplied to that specification.

Mr Stevens: I take it from your evidence that these types of matters of whether the product was robust didn’t arise in your management discussions with your reports?

Richard Christou: No.

Mr Stevens: Sir, that’s probably a good time to take the morning break.

Sir Wyn Williams: Very well. What time shall we resume?

Mr Stevens: If we could say 11.10, please.

Sir Wyn Williams: All right, thank you.

The Witness: Thank you.

(11.00 am)

(A short break)

(11.11 am)

Mr Stevens: Good morning, sir, can you still see and hear me?

Sir Wyn Williams: Yes, thank you.

Mr Stevens: Thank you, I’ll carry on. I want to now look at some specific examples of the management of the contract. Please could we look at FUJ00080690.

This is a document the Inquiry has seen before, particularly in Phase 2. The title is “Report on the EPOSS PinICL Taskforce”.

The date in the top, 14 May 2001, but we can see in the abstract that it is referring to a task that happened between 19 August and 18 September 1998.

Richard Christou: Yes.

Mr Stevens: Firstly, the distribution list: T Austin, M Bennett, M McDonnell (sic); do you recognise those names?

Richard Christou: Yes, both of them reported – well, certainly Martyn Bennett reported to the Managing Director of Pathway and he was responsible for, I think, Quality and Customer Services, from recollection. Terry Austin, I’m not quite sure whether he reported directly to the Managing Director or not. I don’t really recall McDonnell.

Mr Stevens: So did you ever have any direct interactions with Mr Austin or Mr Bennett?

Richard Christou: No, not that I can recall.

Mr Stevens: If we turn the page, please, just for assistance with dating the document, we can see version 0.1, 18 September ‘98 and then, on 14 May 2001, raised to Version 1, “Administrative catch-up”.

Could we go, please, to page 4., I’m just going to go through a few bits of this document. I should ask first, sorry: before you were sent this document by the Inquiry, had you seen it before?

Richard Christou: No.

Mr Stevens: So in the “Introduction”, it says:

“During the week commencing 17 August the EPOSS/ Counter PinICL Stack Reduction Team, known as the Taskforce, was established. The objectives, current workload, composition, outline process and targets were presenting to the team on Tuesday, the 18th with a formal start date of Wednesday, 19 August.”

It goes on to describe the presenting the outcome of the activity and:

“… identifies factors which prevented the original target (zero or near to zero residual PinICLs) being met. During the course of the Taskforce it became clear that there are significant deficiencies in the EPOSS product, its code and design, and these are also presented in this report.”

Can we look then at page 7. There’s a section on the EPOSS Code. It says:

“It is clear that senior members of the Taskforce are extremely concerned about the quality of code in the EPOSS product.”

We don’t need to read it all but we see the last paragraph in that section says:

“Lack of code reviews in the development and fix process has resulted in poor workmanship and bad code.”

Then if we could turn to page 17, please. At the bottom, section 7.3., we see Example 1, and it gives an extract of some code that’s designed to reverse the sign of a number and is equivalent to the command. Fortunately, we don’t need to concern ourselves with the code itself, but over the page, it says:

“Whoever wrote this code clearly has no understanding of elementary mathematics or the most basic rules of programming.”

So you say you hadn’t read the document before?

Richard Christou: I’ve never seen it.

Mr Stevens: Never seen it. Were you made aware of the issues that this document describes?

Richard Christou: No.

Mr Stevens: Do you accept that these are serious issues being described by the document?

Richard Christou: I’m not technically competent to say. I mean, for instance, you say it’s bad code: I’ve got no idea if it’s bad or good.

Mr Stevens: Well, if you don’t have technical competence, you presumably need to rely on technical people?

Richard Christou: Well, I would also point out to you that there’s second document which mentioned the CSR+, which you also sent to me as the additional documents, and I looked at that, and I can only give you my impressions because I’ve not seen either of these documents, but I’m happy to do so: the first is that was in 1998, before the Codified Agreement. So water had flowed under the bridge for almost a year in terms of the development.

And the second point is, if you look at the action points in the CSR+ document, it talks about this, and –

Mr Stevens: We’ll come to that shortly.

Richard Christou: You’ll come to that.

Mr Stevens: Yes.

Richard Christou: Okay, that’s fine. I’m just saying you have to look at both of them in context.

Mr Stevens: I want to look at this one in context at the time that it was drafted, as you say, in ‘98?

Richard Christou: Yes.

Mr Stevens: You’ve read this document, I’ve taken you to extracts from it; do you accept that it’s describing a serious issue in the EPOSS code?

Richard Christou: It’s describing an issue which has got to be corrected and that’s what they’re talking about. How serious it is, I couldn’t tell you.

Mr Stevens: Why do you think that the issue being described in this document was not raised with you at the time?

Richard Christou: It’s a technical issue and it’s not something that would have been raised at board level. That’s what, I think. I think this was too detailed for the Board.

Mr Stevens: Well, this is going, really, isn’t it, to the heart of the product that’s being produced by ICL. Do you accept that?

Richard Christou: I can hypothesise many reasons but I’m telling you that it wasn’t, and I can also say the reason that it wasn’t, so far as I understand these things, and I think Mr Muchow – I think he’s called – said much the same thing in his evidence, not at that level of granularity, and I’d agree with it.

Mr Stevens: So your evidence is that this type of issue is something that should be just dealt with at management level and it shouldn’t concern the Board?

Richard Christou: It’s a technical issue, which should be dealt with at a technical level and, when we come on to the CSR+ document, which you’re coming on to, I think that’s clear to me.

Mr Stevens: Well, let’s look at that now. I think we’re talking about the same document. It’s WITN04600104, please. We have here a “Schedule of Corrective Actions, [Core System Release Plus] Development Audit”; is this the document you were referring to?

Richard Christou: Yes, and you can see it’s gone up to the Managing Director, Stares, and Mike Coombs, and they’re all down here: Bennett, Jeram, Austin. Yes.

Mr Stevens: Did you see this document at the time?

Richard Christou: No.

Mr Stevens: I think you said that you didn’t?

Richard Christou: No, I didn’t.

Mr Stevens: Can we please turn to page 4. The “Introduction” says:

“This document presents the Corrective Action Plan that emerged from a post-audit meeting following the audit of the operation of the CSR+ Development.”

Richard Christou: Yes.

Mr Stevens: At page 6, we see the start of various report observations and then, on the penultimate column, action points –

Richard Christou: Yes.

Mr Stevens: – which I think you were referring to earlier?

Richard Christou: Yes.

Mr Stevens: Could we turn, please, to page 9. So we see in the “Report Observation/Recommendation” it says:

“The audit identified that EPOSS continues to be unstable. PinICL evidence illustrated the numbers of PinICLs raised since the 1988 Taskforce and the rate of their being raised.

“The EPOSS Solutions Report made specific recommendations to consider the redesign and rewrite of EPOSS, in part or in whole, to address the then known shortcomings. In light of the continued evidence of poor product quality these recommendations should be reconsidered.”

Now, before we look at the action points, can I ask whether you recall any discussion that you were involved with where management of ICL were considering or raising rewriting the EPOSS application?

Richard Christou: No.

Mr Stevens: If we look in the “Agreed Action” points, 25/11 –

Richard Christou: Hold on, yes.

Mr Stevens: – it says, “Work on” – sorry –

Richard Christou: The one above, isn’t it?

Mr Stevens: Yes, “Work on AI298”, that’s referring to an Acceptance Incident, isn’t it?

Richard Christou: Yes, and it’s something – well, I understood this because I’ve read the various documents. So far as I can see, it’s something to do with printer error and printer handling, whatever that is, yeah.

Mr Stevens: Well, 80 per cent of problems, this was saying, were to do with error and printer error handling?

Richard Christou: Yes.

Mr Stevens: “Daily meetings instigated. TPA …”

Does that refer to Mr Austin?

Richard Christou: The answer is it might do or I don’t know if he had a “P” in his name.

Mr Stevens: “TPA is of the view that while original code had not been good it would be difficult to justify the case for rewriting now.”

There’s then what appears to be copied from an email from TPA:

“We have not formally closed down the recommendation that we re-engineer the EPOSS application due to its inherent instability.”

It goes on in the final paragraph on this page:

“We will, of course, continue to monitor the PinICL stack for the next few months and, if necessary, re-evaluate this decision.”

Richard Christou: They say would – close this issue formally, whoever Jan is, “Would Jan please close this issue formally”.

Mr Stevens: Then if we turn the page, please, so that was 25 November ‘99.

Richard Christou: Yes.

Mr Stevens: We’re now into December and then into 2000. On 10 May, it says:

“Following response received from MJBC …”

Is that Mike Coombs?

Richard Christou: Yes, it is Mike Coombs.

Mr Stevens: “As discussed, this should be closed. Effectively as a management team we have accepted the ongoing cost of maintenance rather than the cost of a rewrite. Rewrites of this product will only be considered if we need to reopen the code to introduce significant changes in functionality. We will continue to monitor the code quality (based on product defects) as we progress the through the final passes of testing”, and it continues to closing the ticket?

Richard Christou: Right. Yes.

Mr Stevens: Now, there, when it says, “The management team”, who is being referred to there?

Richard Christou: Mike Coombs would have been referring to all the people that you saw on that CSR+ list, I presume – the management attempt within Pathway.

Mr Stevens: Would you accept that what’s being discussed here is a significant decision as to whether or not to incur the costs of rewriting the EPOSS application or accept the costs of maintaining it in the state it’s in?

Richard Christou: I mean, I’ve seen this before but – in some of the witness statements or the questions. But I don’t think this is the issue. When you look at this, yes, there is a cost to maintaining it and, if you like, there’s a penalty in that. But I’ve seen this many times with software engineers. It’s a bit like lawyers when they review cases. Everybody has got their own opinion.

Software engineers always say – some of them do – “Oh I could rewrite this and it’s better”. Well, maybe they can and maybe they can’t but, under the circ*mstances of this contract, what the management team decided – and it’s a technical decision, and they’re accepting, in my view, a cost penalty to do this because it’s safer to keep with the EPOSS, which is the thing that you know, monitor it, and they say it’s been improved since 1998, we’ve moved on two years now, nearly. It’s a complete step into the unknown, to start rewriting and if you rewrite a program from scratch, you’ve got no idea is it going to work better; is it going to work worse; will it fit in with everything else?

From my opinion, it’s a technical decision. Let’s suppose that they’d showed this to me or they’d showed it to the Board. What would have been said was, “Well, this is a technical decision, what do you advise?”, and that’s what they advised. Nobody saw this outside of them, but that’s – outside of Pathway but I don’t think it makes any difference.

Mr Stevens: Well, let’s stand back. ICL have contracted with Post Office to provide a system on certain terms.

Richard Christou: Yes.

Mr Stevens: We saw earlier one of those terms was that it’s robust?

Richard Christou: Yes, we don’t know – and I insist on this – we don’t know – there’s not a legal definition of robust that I’m aware of. Maybe you have one, I don’t know. But – whether it means – comes, I think, from Latin, robur strong, or something like that, able to withstand shots.

Mr Stevens: Well, we’ll come back to that point. The point is the parties agreed that a robust system would be delivered; is that fair?

Richard Christou: It’s in the contract.

Mr Stevens: It’s not for the technical people to determine whether or not the ICL are acting in compliance with legal obligations to Post Office, is it?

Richard Christou: I think that’s true but it’s the technical people who would, in the end, have to produce some opinions. I think Adrian Montague did, at one stage, and said the system was robust, whatever that means. But the technical people would have to tell you. I can tell you what definitions of robust – I can look it up in the dictionary but whether it applies to the system –

Mr Stevens: The technical people can provide you advice on the application itself.

Richard Christou: Right, and they advised that it was better to go ahead with the – not to go ahead with the rewrite but to go ahead with that. I can’t question that decision and I didn’t know about it.

Mr Stevens: But would you not accept that the Board, in order to understand whether or not its legal obligations are being complied with, should be advised of serious concerns in the product that’s being delivered?

Richard Christou: Not if the incident was closed.

Mr Stevens: So is it your evidence that, once the technical people have decided that this doesn’t need to go to the Board, that’s it?

Richard Christou: Yes.

Mr Stevens: The end of it?

Richard Christou: That’s exactly what I think.

Mr Stevens: In your view, what role, then, does the Board have in overseeing the quality of the product that is being produced or delivered to the Post Office in this circ*mstance?

Richard Christou: Right, the Post – I’m sorry, not the Post Office. The Board has to have overall responsibility for seeing that there are properly qualified people who are doing defined jobs in connection with the implementation of the project. That’s what I believe is the job. Their second job is to trust those people and, when appropriate, through the mechanisms that I talk about in the second witness statement, to review progress on the project, like all other projects. The Board is dependent upon the reporting channels which provide information to them, which, ultimately, via the QVRs and all these other things we’ve described, turns up as the Financial Officer’s report and the Chief Executive’s report, which the Board considers.

I’ve also not talked about – and I imagine you’ll come to that – the particular Japanese oversight of this but that’s a different matter. It’s in my witness statement.

Mr Stevens: So do I take it from your evidence that you’re not critical – or, no, let me put it another way.

Are you critical of the management team for not raising this with the Board?

Richard Christou: No.

Mr Stevens: What steps did you take, or the Board take, after appointing the management team to monitor Pathway, to ensure that they were doing a proper job?

Richard Christou: I’ve told you. The reporting structures that I’ve described –

Mr Stevens: Well, if you pause there. If the reporting structures rely on the management team to flag problems to you, how did the Board satisfy itself that problems were appropriately being flagged?

Richard Christou: Because they would question the Chief Executive. The Chief Executive would, in the initial case, talk to the COO and, later on, it would have been just the Chief Executive. He would have had quarterly business reviews with Pathway – that’s not Board meetings, this is management meetings – and those management meetings would have surfaced to him anything that he thought appropriate to report in his Chief Executive’s report to the Board.

And, I have to say, that when you talk about the Board, you must remember that the Board is a majority of Japanese directors, and I’ve talked – I don’t know whether you want to come on to this – about the flows of information which actually existed outside of the Board meeting reports to the Japanese directors in Japan. And I can assure you, these were very detailed dealt with by people who were on the ground within Pathway.

I told you that we had a large team of software engineers from Japan win the development at that time that you’re talking about.

Mr Stevens: So that’s a flow of information directly to Fujitsu Limited?

Richard Christou: The way it works – and, if I may, I’d like to expand on this because it is actually, in my view, really critical – the way Fujitsu worked was they had software engineers embedded in the development, and there were a large team of them. I can’t remember the number. There was actually a legal adviser from Japan. He was a chap called Yasui, who I knew very well. He was an interesting chap, he was qualified in the New York bar and as an English solicitor. So you also had people who – well, there’s the Chief Finance Officer, Adachi, he reported direct to the Chief Finance Officer in Japan.

All of this stuff is a huge amount of information, which is what Japanese like, and it all went through this overseas office, which is about 40 people in Tokyo, and their job is to sit and collate all this information and brief each Fujitsu director before that person gets to the Board meeting. And I know this because when I was in Tokyo, I was recipient of the same thing.

And I’ll just tell you this and then I’ll stop, I’m sorry, but I talk too long – they give you what’s called a “temochi” – “te” means hand, “mochi” means hold, and actually it means two things, something you hold in your band, a handbook, or something that holds your hand and looks after you, and what you get is an A5 book, about an inch thick – it’s literally like this – and inside it what you get is the answer to all the possible questions that you could raise, or might raise, when you go to a Board meeting.

Now, I’m not saying the English directors had this but I’m saying that the Japanese directors, who were a majority on the Board, who controlled the Board, had it, and I can’t believe that between all of this, if there were serious issues that the Japanese were concerned with, they would not have raised it through that chain, as opposed to the standard reporting chain that went up to the Board inside Fujitsu. That’s all I can say. But I know how detailed it is because I’ve lived in Tokyo and I’ve been a recipient of it.

Mr Stevens: So that’s looking at a reporting line from what’s happening in ICL Pathway through to Fujitsu Limited, incorporated in Japan?

Richard Christou: Precisely. I mean, it was outside – it’s outside the normal system. Nothing wrong with it. I’m not saying it shouldn’t have happened but I’m just saying it’s at least as important.

Mr Stevens: I want to ask about – we’ve discussed the Board of ICL Pathway/ICL Plc. In terms of what sat below that – so the Management Committee, which we discussed previously – are you critical of the management team that we referred to earlier in relation to the CSR+ release, are you critical of them for not raising this at the Management Committee?

Richard Christou: You mean an FSMC, a Fujitsu Services Management Committee?

Mr Stevens: No, in the start of your evidence, we discussed the Board and how often that met, and then I understood what you said was there was a weekly Management Committee meeting within ICL?

Richard Christou: When it was – and this is before my time, this weekly – let me be specific. In the times of ICL, there was an ICL Management Committee. We talked about that and I said that, at that time, the Pathway MD, or whatever, did not attend that Management Committee. When we are talking about my tenure, there was a weekly management meeting. The Pathway would not have attended that meeting, it would have been other people and, particularly, once Courtley was there, no operational people would have attended.

Where I could criticise – and this is hypothetical because I don’t know – is whether this was ever surfaced during the preparations for the quarterly business reviews and that I can’t tell you but, certainly, the quarterly business reviews that fed into the board didn’t contain that. I say maybe they should, maybe they shouldn’t, but I don’t know.

Mr Stevens: Let’s break this down.

Richard Christou: Yeah.

Mr Stevens: Before 2000, so before you’re Chief Executive, at ICL Plc level, are there weekly management meetings?

Richard Christou: No, these were – there were operational meetings at the Group level yes. I suppose you’d call it that. Nobody really thought about ICL Plc; they just thought about ICL.

Mr Stevens: So at the Group level?

Richard Christou: At the Group level, yes.

Mr Stevens: Just to be clear on the timeline, at that point, was the Managing Director of Pathway attending the group level management meetings?

Richard Christou: No –

Mr Stevens: How –

Richard Christou: – not so far as I can recall. That’s all I can say.

Mr Stevens: From your recollection, so we’re clear on this, how were issues regarding Pathway raised at the ICL Group level?

Richard Christou: They were raised by the Chief Executive – Keith Todd, in that case – reporting to the Board.

Mr Stevens: So the reporting line would be Managing Director of ICL Pathway –

Richard Christou: Yes.

Mr Stevens: – reports to Keith Todd –

Richard Christou: Yes.

Mr Stevens: – and then it’s Keith Todd’s responsibility to consider whether to pass that on to the Management Committee?

Richard Christou: That’s correct, yes.

Mr Stevens: At that stage –

Sir Wyn Williams: Excuse me, rather than deal with this in the abstract, can we just go back to this particular issue relating to EPOSS, to which the Inquiry has devoted a significant amount of time.

Is it your view, Mr Christou, that the issues relating to EPOSS were appropriately – in inverted commas – “managed” by the team that took the decision or is it your evidence that the team that took the decision should have reported it upwards to someone?

Richard Christou: No, my evidence and my belief is that they took the appropriate action, and that was the end of it.

Sir Wyn Williams: Right. You would not have expected them to have gone any higher than they did, in effect?

Richard Christou: No, I wouldn’t.

Sir Wyn Williams: Right. Okay. I understand. Because it seems to me, with respect to you both, that, whether or not something goes higher, must relate to the specific topic under consideration, rather than a general discussion, if I can put it in that way.

Mr Stevens: Yes, sir, thank you.

Richard Christou: Yes.

Mr Stevens: Let’s look at another specific example, then. It’s FUJ00088036. It’s another document the Inquiry has seen.

Richard Christou: I produced this in my second witness statement, I think.

Mr Stevens: I think this was more recently provided to you.

Richard Christou: Yes, I haven’t seen it before, I actually asked Morrison Foerster to give me some more information on this and that’s where I saw it. I didn’t see it – I haven’t seen it before.

Mr Stevens: Didn’t see it at the time?

Richard Christou: No, no. No.

Mr Stevens: So it’s 2 August 2002 is the date.

Richard Christou: Yes.

Mr Stevens: At this point, you’re Chief Executive?

Richard Christou: Yes.

Mr Stevens: If we look at the originator department and the contributors, do you recall working with any of those people?

Richard Christou: They frankly – let’s have a look. No, none of – I don’t recall knowing any of those people.

Mr Stevens: This document describes – let’s look at page 9, please. It says, “SFS”, which I –

Richard Christou: I don’t know who they are.

Mr Stevens: The Security Functional Specification.

Richard Christou: Okay.

Mr Stevens: It describes there a form of remote administration, a tool called Tivoli Remote Console?

Richard Christou: Yeah.

Mr Stevens: It goes on to say that:

“This has led over time to BOC [Belfast Operations Centre] personnel relying heavily on the use of unauthorised tools (predominantly Rclient) to remotely administer the live estate. Its use is fundamental for the checking of errors. The tool does not however record individual user access to systems but simply record events on the remote box that Administrator access has been used. No other information is provided including success/fail so it is not possible to simply audit failures. The use of such technique puts Pathway in contravention of such contractual undertakings to the Post Office.”

Were you made aware of that the concerns raised in that in particular, that Pathway was in contravention of contractual undertakings to the Post Office?

Richard Christou: No, I’ve never seen this document.

Mr Stevens: Is this a type of document, or maybe not – let me rephrase that. The issue that’s being described, in particular “the use of such technique puts Pathway in contravention of contractual undertakings to the Post Office”, is that a type of issue that you would have expected to be raised to you as Chief Executive?

Richard Christou: It depends whether the Post Office had made any – if the Post Office had made a formal complaint, a breach of contract notice, for instance, then I would have known about it.

I read this in conjunction with another document, which you showed me, which you may come to later, which is Gareth Jenkins writing earlier about the Secure Shell, whatever it is, the SSH, which is designed to, as it says here, provide an acceptable and agreed level, which I presume must be agreed with the Post Office, of secure access. So reading this, what I see is, well, there was a problem, maybe it was a breach of contract, maybe it wasn’t, I don’t know. The Post Office appear to have known about it because it says, “acceptable and agreed”, so it must be agreed with somebody or other, and it was remedied with this Secure Shell. Whether it’s a correct remedy, again, I’m not competent to say, but that’s what it looks like to me.

Mr Stevens: Well, let’s look in more detail at the problem. It’s page 15, please, and it describes “Third line and operational support”?

Richard Christou: Yes.

Mr Stevens: It describes controls, so:

“Individuals involved in the support process undergo more frequent security vetting checks.”

Richard Christou: Yes.

Mr Stevens: “Other than the above controls are vested in manual procedures, requiring managerial sign-off controlling access to post office counters where update of data is required. Otherwise, third line support has:

“Unrestricted and unaudited privileged access (systems admin) to all systems including post office counter PCs …”

The risks are highlighted further down – sorry, if you stay there, please – sorry. It says:

“This exposes Fujitsu Services/Pathway to the following potential risks:

“Opportunity for financial fraud;

“Operational risk – errors as a result of manual actions causing loss of service to outlets;

“Infringements of the Data Protection Act.”

I mean, this, is, would you accept, a very significant problem going to the heart of ICL’s contractual obligations?

Richard Christou: No, I think all he’s saying is we need to beef up our security systems and we’re doing it. That’s the way I read this. But, as I say, I’d never seen the document but this is how I read it: yes, there is a risk. I’m sure you understand that third line support are a few specialists who are very carefully vetted, who are system administrators, but there has to be somebody who can be a system administrator and there aren’t very many of them.

Mr Stevens: Would you accept that what this is saying is that some people have unaudited, privileged access –

Richard Christou: Not –

Mr Stevens: – with system administration access to all systems –

Richard Christou: What I’d accept is –

Mr Stevens: – including Post Office Counters –

Richard Christou: I’m sorry, I beg your pardon. I beg your pardon.

What I would accept is that, at that time, there was an issue and they improved the security systems, on the advice of Gareth Jenkins on his previous document. And, don’t forget, we’ve only just, at this stage, got to complete rollout.

Mr Stevens: So here, where we have an issue that’s being raised that is said by the technicians to be – it’s warning of a breach of contractual obligations, your evidence is this didn’t – you’re not critical of it not being raised with you?

Richard Christou: If there were no solution to it, or if there had been a formal complaint by the Post Office, I would then have been critical because, if there had been a formal complaint, then that was something that definitely should be looked at. What I’m seeing here is a technical person who is identifying improvements in the security which will prevent some issues, and every contract for the development of software is always trying to improve its security. We know nowadays that the most important thing for fixes – you know if you’ve got your PC or your smart phone, every so often you get a security update to protect it from outside interference, and this is a more technical and more sophisticated way of doing things with this system.

I don’t – I’m not critical of them. I would be critical if the Post Office had sent a letter, that’s a different matter, and maybe that should have been surfaced. But I haven’t seen a letter.

Mr Stevens: Why is it relevant or why should it come to you if the Post Office raise it?

Richard Christou: If the Post Office raised a formal breach of contract, then that would become a matter that, certainly, we’d be looking at because the first thing would be doing would be going and talking to Stuart Sweetman to find out what it was about.

Mr Stevens: As part of the responsibility of the Chief Executive in respect of the lawfulness of the company’s operations, do you not accept that, actually, where such a serious contractual issue is raised, that should come to you at the highest level?

Richard Christou: No, I don’t, because I think the problem has been solved at a technical level.

Mr Stevens: Could we move on to Horizon Online, please. It’s FUJ00095628. This is an email to which you referred earlier.

Richard Christou: Oh, yes, I know about this.

Mr Stevens: If we can go to the second page, please. So it’s an email from Duncan Tait, you’re not in copy. I assume you wouldn’t have seen this at the time?

Richard Christou: No, no. Not at all. This is an issue for Duncan Tait, not for me.

Mr Stevens: It refers to meetings between Post Office and Fujitsu –

Richard Christou: Mm.

Mr Stevens: – and it talks about:

“Their confidence has been knocked due to:

“[Firstly] Ongoing issues with Oracle stability impacting HNG-X stability …

“[2] The data centre outage

“[3] An outage caused by ‘Fujitsu operator error’ last week which caused a 45-minute loss of service.”

We then get some requests from Post Office: (1) is to look at P&L for the account to make sure it’s sustainable and asking for an open book arrangement; (2) is for an independent review; and then (3):

“Finally, he wants Dave Smith to have some dialogue with Richard C …”

I assume that refers to you?

Richard Christou: Yes, it does, yes.

Mr Stevens: “… so they can test the Japanese Board’s commitment to the account and programme …”

Richard Christou: Mm.

Mr Stevens: Firstly, can you recall whether you were aware of the issues described in this email?

Richard Christou: No, the answer is I wasn’t and I’ve never seen the email. I mean, it would be for Duncan to talk to you about that.

Mr Stevens: So you’re saying then you can’t recall Duncan Tait passing on or discussing these issues with you?

Richard Christou: No, well, let me be clear about this. The only one I think he would have passed on to me was the dialogue with Dave Smith about the Japanese Board. Remember at this time I was living in Tokyo and I was responsible for the global business group as a whole. I don’t remember whether we ever had that call, that’s all I can tell you. But if I had have done, I mean, what the purpose was, to talk about the Japanese Board’s commitment; it wasn’t about things like an Oracle outage, or whatever it was. That’s all I can say.

Mr Stevens: I want to look at another document now, please. It’s POL00028838.

Richard Christou: Yes.

Mr Stevens: It’s a document well known to this Inquiry. Firstly, can I ask when you first saw this document?

Richard Christou: When you sent it to me, which would have been some time in May.

Mr Stevens: So looking at the attendance list –

Richard Christou: Right, let’s have a look.

Mr Stevens: It’s not dated but the Inquiry understands it’s in October 2010. Were any of those people in the attendance list reporting directly or indirectly to you at that stage?

Richard Christou: No. Could I ask one question about this, please? When I read it, I wasn’t clear who originated the document. It looked to me like the Post Office did, but they talk about “we”, and so on. Can you tell me that or?

Mr Stevens: Well, I’ll ask you questions about if you saw it or if you didn’t and –

Richard Christou: Oh, right, okay, but I never saw it, and the only name I know, because of all the fuss about it, is Gareth Jenkins. None of these reported to me.

Mr Stevens: Do you know Gareth Jenkins when you were working at Fujitsu?

Richard Christou: Not that I can recollect. He wouldn’t be somebody that I would have had direct contact with.

Mr Stevens: Now, this document describes what we now know as the receipts and payments mismatch bug.

Richard Christou: Yes.

Mr Stevens: Were you ever given any information on the bug described in this document that you’ve now read?

Richard Christou: No.

Mr Stevens: That document can come down. Thank you.

Just before this – that was 2010 – in May 2009, Computer Weekly ran an article on the Post Office prosecuting subpostmasters and allegations as to the adequacy of the Horizon data to support those prosecutions were raised. Were you aware of that Computer Weekly article at the time?

Richard Christou: No, I wasn’t.

Mr Stevens: I want to look now, then, at prosecutions, please. Can we bring up your second witness statement, page 21, it’s paragraph 101. You say:

“As already stated in my first witness statement, I had no knowledge of this issue, and I do not recall it being raised at any Board meeting when I was present, (see paragraphs 75 onwards).”

Richard Christou: Yes.

Mr Stevens: If we just scroll down slightly, please – thank you – you say:

“I would now, however, like to comment more specifically on this point, in the light of further documents not known to me at the relevant time, which have since been provided to me by Morrison Foerster (at my request) for the purposes of completing this statement.”

So everything that follows, where, for example, you say, “My understanding is that the requirement in the Codified Agreement”, that’s your understanding today?

Richard Christou: Now, yes. That’s correct.

Mr Stevens: Not at the time?

Richard Christou: Not at the time.

Mr Stevens: Could we please go to FUJ00000071, again, and could we turn to page 196, please. We referred to this earlier, it’s schedule A15, setting out requirements, and we see a number there of various requirements?

Richard Christou: Yes, yes.

Mr Stevens: If we turn, please, to – apologies.

If we can go, please, to 291.

Richard Christou: 291.

Mr Stevens: Page 291, please. Thank you. Schedule A16 is the “Solutions”. So these are the response, in effect, from ICL Pathway. Could we look, please, at page 363. If we go down to that, please.

I think I may have an incorrect reference here, sorry. If we can go up, please, to reference 393, I think.

Richard Christou: (Sotto voce) English and Welsh.

Mr Stevens: Just bear with me, I will just find that reference. 393, please. Page 393, that’s it. If you can go up, I got my requirements and page numbers mixed up.

Richard Christou: Ah, here we are, yes.

Mr Stevens: If we could go up, please, so we can see the start of the reference. You see there reference 829, and this refers to Pathway. It says:

“Pathway confirms it will ensure that all relevant information produced at the request of POCL [Post Office Counters Limited] shall be evidentially admissible and capable of certification in accordance with the Police and Criminal Evidence Act 1984 and the Police and Criminal Evidence (Northern Ireland) Order 1989 …”

Richard Christou: Yes.

Mr Stevens: It goes on to say about data volumes.

When you were involved in the tendering process, would you have been involved in dealing with this response or –

Richard Christou: I’ve got no idea whether it was even in the tendering. I mean, this is from the Codified Agreement and I never read this.

Mr Stevens: Could we look, please, at FUJ00001743.

Richard Christou: Oh, yes.

Mr Stevens: So this is a “Service Description for Implementation and maintenance of security policy and procedures” dated –

Richard Christou: Yes.

Mr Stevens: – 6 January 2003.

Richard Christou: Yes.

Mr Stevens: In your statement, you say that, to the best of your belief, this document contained the first contractual requirement on Fujitsu to provide witness evidence in litigation.

Richard Christou: Yes.

Mr Stevens: Again, I understand that’s your knowledge now but not at the time?

Richard Christou: It’s my knowledge now. Can I just amplify that. I never regard PACE as necessarily requiring witness. It required a certification with the potentiality for a witness but, when I look at this, it seems to me different to PACE.

Mr Stevens: Well, let’s – at the time, did you have any awareness of PACE certification –

Richard Christou: No, no. At the time, I didn’t know about PACE – I mean, I’ve said that in my witness statement – because I didn’t read that schedule.

Mr Stevens: Can we turn, please, to page 17?

Richard Christou: Yeah, the litigation.

Mr Stevens: If we can have “Litigation Support”, please. So we see here that it refers to Post Office submitting Audit Record Queries or Old Format Queries, essentially a request for ARQ data, as we know it?

Richard Christou: Yes.

Mr Stevens: It says (a), to present the record of transactions but:

“b) subject to the limits set out below:

“(i) analyse:

“the appropriate Fujitsu Services’ Helpdesk records for date range …

“branch non-polling reports for the branch in question; and

“fault logs for the devices from which the records of transactions were obtained …”

Richard Christou: Yes.

Mr Stevens: Then, if we go down – thank you – we see:

“… request and allow the relevant employees of Fujitsu Services to prepare witness statements of fact in relation to that query …”

Richard Christou: Yes.

Mr Stevens: Now, this contractual agreement for Fujitsu employees to prepare witness evidence of fact, as a contractual service being offered by ICL, or Fujitsu Services Limited, do you consider that that should have gone to the Board to determine whether it was something that ICL or Fujitsu Services Limited wanted to offer or should agree to provide?

Richard Christou: I think this is a – I think this is the most serious question of all and it comes back to some of the things that I said in my witness statement. There was no requirement for this particular document to be approved by the Board. If you look at the beginnings, I think it goes as far as Martyn Bennett. When one looks at it by hindsight – and I’m not saying this to mitigate what I think – and I’ve said before – is a miscarriage of justice, it was not raised to the Board.

Should it have been raised to the Board? I think the problem with this document is that the requirement for witness statements shouldn’t have been dealt with by Security personnel and, in the midst of a security document, should it have been raised to the Board? It wasn’t.

What I say in hindsight is I wish it had but that’s hindsight. There are many issues you could have raised to the Board but it chose not to do so.

Mr Stevens: Would you accept that this contractual service that’s being agreed in this document is outside of the normal course of business for Fujitsu?

Richard Christou: No, I wouldn’t. No, I think that’s not – well, it’s not our business to provide witnesses, certainly we don’t provide, or we didn’t, in my day, provide expert witnesses. That’s absolutely true. When I looked at this, one of the problems, as I understand it, is, of course, that PACE was repealed in – Section 69 was repealed –

Mr Stevens: I’ll come back to the question, sorry.

Richard Christou: Yes.

Mr Stevens: Is what is being agreed here, the provision of witness statements by Fujitsu employees, outside of the normal course of Fujitsu’s business at that time?

Richard Christou: If it was only a witness statement of fact, that this is a document that we’ve got off the computer, I wouldn’t have thought so. I mean, I’m sure that that was something that happened in other contracts. I don’t know but, as long as it was a statement of fact, I wouldn’t particularly have had a problem with it, you know, “This is the document, this what I took off, there it is. Make of it what you will”, as long as it was fact.

Mr Stevens: So is it your evidence that, if it’s a witness statement of fact, you didn’t think it needed to come to the board?

Richard Christou: No, I wouldn’t. If it was an expert – let me be clear about this: if somebody was saying, “We want a Fujitsu witness to be an expert witness, speaking about all sorts of things about the system”, that was not something that we would have provided to a customer. We would have said, “Go and get an expert and get them to do it”.

So I don’t think this is out of the ordinary course of business but, if you went beyond a statement of fact, here’s the document, this is what I took off, and you can examine it with all the bits and pieces that are in the earlier section”, but that’s fact.

Expert opinion, no. That, definitely not. We’re not in that business. That’s what I think.

Mr Stevens: Well, when it says, looking here, “Subject to the limits below, analyse”, it’s analysing “fault logs for the devices from which the records of transactions were obtained in order to check the records of transactions extracted by that query” –

Richard Christou: In order to check the integrity of records.

Mr Stevens: Integrity of records. Where there’s analysis of fault logs, what’s your view on that –

Richard Christou: Okay, I looked at this, and the fact that the fault log is there is a statement of fact and, when you look at it, you see that there are various faults, so you have to describe them. I think it’s important to talk about checking the integrity of the records. I’ve – you said this elsewhere in my statement but, in my view, integrity means uncorrupted, whole and complete, but it doesn’t mean accurate, which is what we’re coming down to: the question of whether there were discrepancies in the cash account.

And I think this is the word that was used, integrity, earlier on when they were in these this other systems specifications, when they were talking about security. It’s all about security, not tampered with.

Mr Stevens: I understand you’ve listened to some of the evidence of the Inquiry?

Richard Christou: Some of them here, not all, by any means, but I tried to prepare myself as best I could.

Mr Stevens: Have you heard, for example, of the Clarke Advice of the 15 July 2013 –

Richard Christou: No, I’m sorry, I haven’t. No.

Mr Stevens: – referring to Post Office’s use of Gareth Jenkins as an expert witness?

Richard Christou: Well, that surprises me and it’s not something that I would have expected Fujitsu to do.

Mr Stevens: If a Fujitsu employee was being used to provide expert evidence, my understanding is you think that something like that should have gone to the Board?

Richard Christou: Definitely, and I would have made sure in those – or me, but what I would expect is that that expert witness would have been properly advised by an independent solicitor.

Mr Stevens: Can you explain why, in this case or in this time, the use of Fujitsu witnesses, such as Gareth Jenkins, wasn’t raised at a Board level?

Richard Christou: As I’ve said, because – when you say “at this time” do you mean 2013?

Mr Stevens: No, I’m so sorry, at the time of this document, 20 –

Richard Christou: Right, what I’m saying is that I don’t think that witness statements of fact would have been necessary and I don’t think – I’m not critical of that. I’m very critical of the use of a Fujitsu employee as an expert witness if they’re not properly advised by an independent legal counsel.

Mr Stevens: Can you offer a view on why that latter issue didn’t come to the Board of Fujitsu?

Richard Christou: Well, I don’t know when it started, so I can’t tell you. But I suspect it’s more ignorance than anything else. I doubt that the Security people that you’re talking here really understood the difference. Their mind is always on integrity, untampered with, not corrupted; it’s not about being an expert witness.

Mr Stevens: Could we turn the page, please. It referred to limits –

Richard Christou: Yes.

Mr Stevens: We see at (iv) and (v):

“Fujitsu Services’ obligations … in (i) and (ii) above shall be limited, in aggregate, to dealing with a maximum of 150 (in aggregate) Record Queries …”

Richard Christou: Yes.

Mr Stevens: The Inquiry has heard evidence about Fujitsu’s remuneration in respect of witness evidence produced. Did you have any knowledge of that remuneration?

Richard Christou: No.

Mr Stevens: That document can come down. Thank you.

Sir Wyn Williams: Well, just before we do, Mr Stevens, I just want to be clear, Mr Christou, one can haggle about the interpretation of contractual clauses, and I would just like your help, as a very senior person in Fujitsu, as to two matters.

First of all, in your opinion – and I stress “in your opinion” – does the clause that we just looked at oblige Fujitsu to provide a witness to give opinion evidence?

Richard Christou: No.

Sir Wyn Williams: Right. So have you got any idea how it came to be, if it is the case, that, from approximately the mid-2000s, that is around 2004/2005, a Fujitsu employee – and we all know who it is, Mr Jenkins – was making witness statements which included opinion evidence?

Richard Christou: I do not know, sir. I do not know.

Sir Wyn Williams: But I think you do agree with Mr Stevens that such activity, if it were to be approved, should have been approved by the Board?

Richard Christou: I do, yes.

Sir Wyn Williams: Fine. Thank you.

Mr Stevens: The matters to which the Chair was just referring, who within your reporting line would have been responsible for oversight of this Litigation Support?

Richard Christou: Martyn Bennett, I think, is the correct one. I mean, he’s a long way down because – I don’t know whether he was still there in that time, 2005.

Mr Stevens: In 2003, is the reporting line from either Martyn Bennett or his replacement through David Courtley?

Richard Christou: Yes, yes. Through the Managing Director of Pathway to Courtley to me. Yes.

Mr Stevens: Could we, please, look at FUJ00003534, and this is my last topic.

Richard Christou: Yeah.

Mr Stevens: These are actually draft minutes but I want to take you to a part of them. It’s on 20 August 2002, a meeting of the FSMC. Could we look at page 14, please. If we could go down to “Relationship with the UK Government”:

“Mr Christou reported that the Government was our biggest customer and it was essential that we had a good relationship with them. Renegotiating Libra had been very stressful …”

Just to pause there, that’s nothing to do with the Post Office, I understand, Libra?

Richard Christou: No, this isn’t. Nothing to do with the Post Office at all.

Mr Stevens: “… and all the Permanent Secretaries were aware of the negotiation that had taken place. During the last year we had, again, been the topic of conversation as the Pathway and HMCE contracts were being renegotiated.

“While these negotiations were ongoing it was important not to be too friendly or else we risked weakening our position. However, we were now able to build on relationships. Mr Christou had visited all the permanent secretaries and he had also joined them on a training weekend. Consequently, although there was room for improvement, we are on good terms with them and they are, by and large, all satisfied with the service Fujitsu Services provide.”

Richard Christou: Yes.

Mr Stevens: When you say “all the Permanent Secretaries”, there is that every Permanent Secretary to each Government department or just those to which Fujitsu had contracted with?

Richard Christou: No, I mean the ones that we were dealing with, yes.

Mr Stevens: You go on to say:

“Mr Christou added that the relationship with the DTI was good. He was having talks with representatives, both in his capacity as a member of various DTI committees, and also as a service provider.”

Richard Christou: Yes.

Mr Stevens: How often did you meet with representatives of the Department for Trade and Industry?

Richard Christou: Actually, quite often because there were various fora, you know, they used to get all the IT people together for instance, and we met on numerous occasions. I had the Minister’s name – Patricia something, in those days? I can’t remember the last name but I used to spent quite a lot of time with her.

Mr Stevens: Patricia Hewitt.

Richard Christou: That’s right, Patricia Hewitt, and there was a Permanent Secretary. I’m afraid I can’t remember the name. But we used to visit them quite regularly because we had Elgar with them, which was a very large project.

Mr Stevens: At any point when you met with representatives of DTI, did you discuss the actual adequacy of the Horizon IT System?

Richard Christou: No, it was never the topic of discussion. We were always talking about our contract with them.

Mr Stevens: From 2003 onwards, did you ever meet with representatives of the Shareholder Executive?

Richard Christou: Could you be more – the Shareholder?

Mr Stevens: Sorry, the Shareholder Executive, a Government agency that managed the Government shareholding interest in companies, including Post Office Limited?

Richard Christou: No, I didn’t know anything about that. No.

Mr Stevens: Standing back, having examined the documents that you’ve seen today, do you consider there to have been, in your view, any relevant management failings within Fujitsu that was relevant to the prosecution of subpostmasters?

Richard Christou: I think the issue comes down to this question of – I’m sorry to keep on mentioning Gareth Jenkins – how he came to be an expert witness and I can’t answer that question but I think that’s the nub of it.

I’ve always felt that it was the processes of information flow that led to the prosecutions that were the cause to of the problem, rather than, if you like, bugs in the system itself but I can’t answer that.

Mr Stevens: Sir, those are all the questions I have. Before I turn to see if there are any from Core Participants, do you have any questions?

Sir Wyn Williams: No, I’m fine, thank you.

Mr Stevens: Ms Page, I think that’s it. Five or ten minutes’ worth of questions.

Sir Wyn Williams: Well, then, can we ask the shorthand-writer whether she’d like a break before Ms Page asks questions, or whether she would prefer to have a maximum of ten minutes and then have a lunch break, in effect.

Mr Stevens: We’re fine to continue, sir.

Sir Wyn Williams: Fine. Then sorry to impose a ten-minute time limit on you, Ms Page, but I think that’s reasonably fair in the circ*mstances.

Ms Page: No difficulty at all, sir. Thank you very much.

Questioned by Ms Page

Ms Page: I want to ask you a few questions, please, about whistleblowing.

The Bates litigation established as fact that there were bugs, errors and defects in the Horizon system which could and did cause errors in Post Office branch accounts. Now, you don’t appear to accept that that means that Fujitsu failed to deliver a product to Post Office, an accounting system, that was fit for purpose but, nevertheless, there might be those who do. Do you understand what I’m saying there?

Richard Christou: I understand where you’re coming from. I mean, what I’m saying is not to mitigate. I’ve said this before but I’ll say it again. I do not mitigate the seriousness of the miscarriage of justice; that’s the first point. But the issue to me is, first of all, fitness for purpose was never part of the Codified Agreement; it was specifically excluded. What we did was to agree a specification, agree acceptance tests with the Post Office, and that was the basis of the contract.

We accept – I mean, I accept now, having heard everything in the appeals against the cases, there were bugs. I don’t believe that it was the bugs that caused the issue. The issue is that these discrepancies weren’t properly presented in evidence. That’s what, I think. Why it happened I’m not competent to say but that’s my view.

Ms Page: All right, well, what I want to ask you about is Mr David McDonnell, who gave evidence to this Inquiry, about the shockingly bad development of the EPOSS code and Mr Stevens this morning has taken you to the documents dealing with how that was managed within Pathway, both in 1998 and in 2000.

Now, I don’t need to go back over what you’ve said already. You don’t criticise the way that, what you say, the technical issue was managed. Nevertheless, at the time and subsequently, Mr McDonnell was deeply critical of the way that that was managed and he gave evidence about the fact that he was sidelined, as a result, moved into a different role. So what I want to ask you about is what process was there for him to blow the whistle at the time? What process was there for him to take his concerns higher when the management of Pathway refused to accept what he was saying?

Richard Christou: Well, in those days, there was certainly no whistleblowing procedure. That’s the first thing, and I don’t think people thought about it in those days.

What I will say to you is that I never shut the door to my office. If he had felt sufficiently strongly, he could have come and seen me. That’s all I can say. I don’t actually know him but, if somebody had come and seen me, then I would have investigated, it might not have meant a different decision, but he didn’t. So that’s all I can tell you.

Ms Page: A different area but still on whistleblowing. The Inquiry has now seen ample evidence that Fujitsu support teams were effectively able to tamper with branch accounts, without the subpostmaster knowing, and that wasn’t for a short period, that was over many, many years. So, in effect, the security designs put in place just didn’t stand up to the reality test: the support teams were given privileged access on what we’ve seen revved to as a needs-must basis and that continued not only thorough your time, but also for many years subsequently, really all the way through until the Group Litigation.

It was really only the testimony of a Panorama whistleblower, who then became a whistleblower in the Bates litigation, Mr Richard Roll, that actually started the process of finding out the truth. Obviously, in all of that time, there were many employees within the Fujitsu support team who knew what was going on and knew about the ability to tamper with branch accounts and, indeed, there were many concerns raised from the mid-2000s onwards about it.

So, again, why were there no Fujitsu whistleblowers: what happened; why did nobody come forward?

Richard Christou: Well, I’ll make two points to you. First of all, I don’t like the word “tamper”, that’s a pejorative term. Secondly, my understanding is – and I knew nothing about this particularly at the time – that these alterations were made in conjunction with the Post Office, in order to correct various issues. That’s what I saw coming out of the evidence.

Why were there no whistleblowers coming forward? You’d have to ask the potential whistleblowers in Fujitsu. All I’m saying to you is that nobody came to me and blew any whistles.

Ms Page: You don’t take any responsibility?

Richard Christou: No, I’m not –

Ms Page: So you don’t –

Richard Christou: I’m not mitigating that there is a gross miscarriage of justice and, if you think I don’t feel for the postmasters and the subpostmasters, you’re wrong, I do feel. And I also feel aggrieved that what I felt was a good system has been put into such disrepute. But I’m not responsible for it and I’ve told you before – sorry, perhaps I shouldn’t say it like this, perhaps with more respect – I’ve said before that the real issue is the way the prosecutions were handled and the flows of information.

Why there were no whistleblowers and what they would have told me if there were any, I don’t know, and I’m sorry about that but I can’t help you further.

Ms Page: Let me just ask you this final question: when concerns first started to be raised about the possibility that Fujitsu could insert transactions – if you don’t like “tamper”, that’s what they were doing – could insert transactions into branch accounts without postmasters knowing, when those concerns first started to be raised, why was there no concerted effort by Fujitsu management to find out the truth?

Richard Christou: I don’t know when they were raised and you’re assuming that there was none, and you’re insisting on the word “tampered”, so I’m afraid my answer is I don’t know.

Ms Page: Thank you.

Those are my questions, sir.

Sir Wyn Williams: Thank you, Ms Page.

Is that it, Mr Stevens?

Mr Stevens: Yes, sir, that’s it.

Yes, that’s it from the Core Participants and Mr Christou’s evidence.

Sir Wyn Williams: Yes.

So Mr Christou, thank you very much for making two statements – written statements, that is – and for giving evidence to the Inquiry this morning. I’m grateful to you.

I think we’ll now adjourn, shall we, and take our lunch break so what time shall we resume?

Mr Stevens: 1.30, please, sir.

Sir Wyn Williams: Fine, see you all then at 1.30.

(12.30 pm)

(The Short Adjournment)

(1.30 pm)

Mr Blake: Good afternoon, sir, can you see and hear me?

Sir Wyn Williams: I can, thank you.

Mr Blake: Sir, this afternoon we’re going to hear from Mr Tait.

Sir Wyn Williams: Yes.

Mr Blake: As we are starting at 1.30 we are likely to have two afternoon breaks today.

Sir Wyn Williams: Yes, certainly.

Questioned by Mr Blake

Mr Blake: Thank you very much. Can you give your full name please?

Duncan Tait: My name is Duncan Andrew Tait.

Mr Blake: Mr Tait, you should have in front of you a witness statement dated 21 May 2024; is that correct?

Duncan Tait: That’s correct.

Mr Blake: Can I please ask you to turn to page 67 and confirm that that is your signature.

Duncan Tait: It is.

Mr Blake: Thank you. Is that statement true to the best of your knowledge and belief?

Duncan Tait: It is.

Mr Blake: Thank you. That statement has a Unique Reference Number of WITN03570100 and that will be uploaded onto the Inquiry’s website. Just to begin, by way of a little bit of background, you started your career at BAE Systems in around 1985; is that correct?

Duncan Tait: That is true.

Mr Blake: You worked for a number of different firms, largely in IT related roles?

Duncan Tait: That is true.

Mr Blake: You joined Fujitsu in 2009?

Duncan Tait: I did.

Mr Blake: I think you came in straight at Managing Director level –

Duncan Tait: I did.

Mr Blake: – in what was then the Private Sector Division?

Duncan Tait: Yeah.

Mr Blake: In very simple terms, where did that division fall within the overall hierarchy of Fujitsu?

Duncan Tait: So the Private Sector Division reported directly to the UK & Ireland’s CEO, and there were a number of other divisions, there was a Government Business Division, and then I think there were two or three divisions that delivered services into those so, for instance, there was a CORE Division and an Applications Division, where the bulk of the people in the business worked.

Mr Blake: I think you’ve said in your witness statement that the Post Office business fell within the Private Sector Division because the intention was for it to go private?

Duncan Tait: Yes, that was my understanding when I joined.

Mr Blake: Thank you. When you were Managing Director, you reported directly to the CEO, who was, at that time, Roger Gilbert; is that right?

Duncan Tait: That’s true.

Mr Blake: In 2011, you became CEO?

Duncan Tait: I did, in April 2011.

Mr Blake: Thank you. From April, you were CEO for UK & Ireland. Then, over time, you took more and more countries, I think, in 2014, you were CEO for Europe, Middle East, India and Africa –

Duncan Tait: That’s right.

Mr Blake: – including the UK at that time?

Duncan Tait: Including the UK.

Mr Blake: 2015, you were appointed to the Board?

Duncan Tait: Of Fujitsu in Japan, yes.

Mr Blake: And 2016, you became responsible for the Americas. Is that in addition to EMEIA and –

Duncan Tait: That is in addition to those.

Mr Blake: So your portfolio expanded and expanded as the years went by?

Duncan Tait: It did.

Mr Blake: When did you leave Fujitsu?

Duncan Tait: I left at the end of July 2019.

Mr Blake: Thank you. During your time at Fujitsu, how significant was the Post Office as a customer?

Duncan Tait: Well, Fujitsu was one – sorry, Post Office was one of the larger clients within the Private Sector Division, and formed a reasonable part of Fujitsu, UK & Ireland. Obviously, the further you go up the company then it becomes a smaller part but nonetheless important.

Mr Blake: Thank you. Perhaps we could start with a presentation by your predecessor as CEO, if we could turn to FUJ00116969. It is a business update that was produced by Roger Gilbert. You would have been Managing Director at the time that this was produced.

Duncan Tait: Okay.

Mr Blake: Do you recall this document from your time at Fujitsu?

Duncan Tait: I don’t recall it precisely but some of the things – in reading it prior to arriving here today, some of the concepts in there I’m familiar with.

Mr Blake: If we scroll down, please, and over to page 3. Thank you very much. One of the objectives in 2011 seems to have been to increase the number of 30 million plus accounts, and we see there a chart separating out private sector and Government. We see “RMG”, would that be the Royal Mail Group?

Duncan Tait: Yes.

Mr Blake: Would the Post Office fall within that category?

Duncan Tait: It would.

Mr Blake: So am I right to understand from this chart that, at least as at 2011, the Royal Mail Group was one of the biggest clients, one of the largest in terms of the amount of money?

Duncan Tait: Yes, it would. This was a – if I understand the chart correctly, this is accounts with revenues of more than £30 million per annum.

Mr Blake: There are a relatively small number, we see it separated it by private sector and Government, so in the private sector, there aren’t that many?

Duncan Tait: Yes.

Mr Blake: They’re not in alphabetical order. Are we to read into that that the Royal Mail Group was the most significant in terms of income, or is there some other reason, do you think?

Duncan Tait: I don’t know the reason for choosing the order of those accounts, there would also have been one with Thompson Reuters there, which also would have been very significant at the time but I don’t understand the order of those.

Mr Blake: Thank you. Who were your main points of contact at the Post Office, both when you were Managing Director and then, subsequently, as CEO?

Duncan Tait: When I first joined, my main point of contact would have been the Chief Operating Officer, who was Mr Mike Young. Then, when I was promoted to become CEO of Fujitsu, UK & Ireland then there would have been number of people – I think Lesley Sewell at some point, there would have been Ms Vennells – and, for a period of time after that, there would also have been – Mike Young would still have been in the company for a period of time after I became CEO.

Mr Blake: So was your liaison/your relationship when you were CEO, largely with your equivalent CEO or perhaps COO?

Duncan Tait: I would say – it wasn’t that rigid from a hierarchical perspective. I would have spoken to the CEO and to other members of the Executive Committee.

Mr Blake: Thank you. That document can come down. Can you assist us with the committees within Fujitsu that might look into risks arising from your relationship with the Post Office? What were the key committees that you would be involved in?

Duncan Tait: In terms of formal statutory committees, there was a corporate governance committee that I recall. There was also an Audit and Risk Committee. Then there were a number – if you think about those being statutory committees, those were the two.

Mr Blake: Thank you. Would the Post Office be a standing item on those committees or would they just be raised on an ad hoc basis?

Duncan Tait: Well, the process of managing risk in the company was both top-down and bottom-up, so wherever there was risk, you would have expected those to be reflected on the risk registers.

Mr Blake: Who typically sat on those committees?

Duncan Tait: It would have been the chairman of whichever statutory entity it was and key members of probably of the Executive Committee, and I would imagine a member of the legal community as well.

Mr Blake: Thank you. So likely a General Counsel or equivalent would also attend those?

Duncan Tait: I think so.

Mr Blake: Thank you. Can we please turn to your witness statement and paragraph 73, it’s on page 24. There’s no need for you to turn to it; it should come up on the screen. It’s WITN03570100. Thank you. It’s page 24 that I’d like to start with. I’m just going to take you to two passages from your witness statement. The first is paragraph 73. You say there:

“I recall being made aware of subpostmasters’ claims regarding Horizon’s lack of data integrity shortly after joining Fujitsu. My understanding at the time was that these claims were unfounded, that Post Office had been involved in some proceedings against subpostmasters, and that Fujitsu had assisted Post Office with these proceedings on occasion. I do not know the details of [those] proceedings.”

Paragraph 75, please, which is on page 27. If we scroll down, just to the next paragraph, please – thank you – you say there:

“While I became aware of subpostmasters’ claims shortly after joining Fujitsu, I did not understand that Fujitsu was assisting Post Office in proceedings against its subpostmasters on a regular basis until later. Indeed, I do not recall being aware that Post Office was being assisted by Fujitsu until at a meeting Ms Vennells asked me to thank my team for its assistance with the prosecutions. I did not reveal that I was not aware of this assistance. I do not recall the date of this meeting.”

You started in 2009, you left in 2019.

Duncan Tait: Yes.

Mr Blake: When, approximately, during that period did you become aware, first of all, that any prosecutions were taking place that Fujitsu had a role in?

Duncan Tait: I think the word “prosecutions” is very specific, as I now understand, and I think probably around the time Ms Vennells mentioned it to me, at the time you just referenced a few moments ago. However, there is a document from 2009 when I first joined, which I think would also be quite useful to see.

Mr Blake: Yes. Well, we’ll go to that document and I’m going to take you chronologically.

Duncan Tait: Okay.

Mr Blake: But you say here, “I don’t recall the date of the meeting”. So it seems as though it certainly became prominent to you at a meeting with Ms Vennells, and really my question is: when, approximately, would that meeting have taken place?

Duncan Tait: I can’t recall when that meeting – I mean, clearly it must have been after Ms Vennells was appointed CEO of the Post Office but I don’t recall exactly when that meeting was.

Mr Blake: Very approximate? We’ve got a 10-year period to cover.

Duncan Tait: It must have been around 2012 or ‘13.

Mr Blake: Thank you. Do you recall when, if at all, the issue of prosecutions was raised at Board level within your firm?

Duncan Tait: I’m not sure it was.

Mr Blake: Not even until 2019?

Duncan Tait: Do you mean Fujitsu Board in – I’m know I’m not supposed to ask –

Mr Blake: You assist me. At any level of the various Boards that we’ve already heard about, do you think that prosecutions were raised?

Duncan Tait: I don’t think so.

Mr Blake: Let’s go chronologically and we’re going to start with your first few months at Fujitsu. Could we turn to FUJ00174184, please. We’re going to start in October 2009. I’m going to start with the bottom email. There is an email from Suzie Kirkham, I believe she was the Royal Mail Group Account Manager at Fujitsu; is that something you recall?

Duncan Tait: I do.

Mr Blake: Gavin Bounds, can you assist us with who he because we see his name on quite a few of these emails.

Duncan Tait: So Mr Bounds was a senior executive who was responsible for the Post Office Account, he was what was known as a Business Unit Director and would have worked directly for me.

Mr Blake: What was your relationship with him?

Duncan Tait: I was his immediate line manager.

Mr Blake: In terms of your personal relationship; did you get on well, did you have a free and frank exchange?

Duncan Tait: Yes, I would say so.

Mr Blake: She says as follows:

“I have detailed below a brief summary of a subpostmaster claim that Horizon fails to maintain the integrity of branch accounts if the branch experiences technical issues.

“Horizon has been running …”

She produces a response. We can see, in fact, the subject is “Horizon Data Integrity publicity – briefing summary”. She says:

“Horizon has been running for around 10 years, during which time Post Office has had to handle a number of legal cases surrounding system integrity, mostly from apparently disgruntled or fraudulent subpostmasters. Fujitsu has twice appeared in court to support Post Office. Only once has Post Office conceded its case, and this was at a time when the audit trails were too short to positive sufficient evidence to refute a subpostmaster’s claims.

“In recent weeks a number of subpostmasters are again querying the data integrity of Horizon and are claiming that they are owed money by the Post Office due to inaccurate branch accounts. These subpostmasters are talking to the press (London News) and trying to gain some momentum to support their case – it’s even rumoured that the BBC is considering a Watchdog programme on the subject. Post Office is trying to head off this possible escalation of interest by preparing a stock of simple responses to possible questions from the media, or from interest groups. I have summarised below the timeline that details when Post Office asked Fujitsu for assistance in compiling this information.”

She then goes on to give a timeline and we see there the bottom two bullet points on the page, it refers to a conference. She says:

“During the conference call [the Post Office] requested from Fujitsu a short paper to describe how Horizon maintains the integrity of the branch accounts when certain issues affect the branch, [for example] blue screen, hardware failure. Report requested to be given to Dave Smith by 2 October.”

Then it refers to Gareth Jenkins. Just pausing there, was Gareth Jenkins somebody who you knew personally?

Duncan Tait: No. I don’t believe I’ve ever met Gareth Jenkins.

Mr Blake: Was he somebody who you ever emailed directly or corresponded with directly?

Duncan Tait: I don’t believe so, no.

Mr Blake: “[Fujitsu architect] spent the best part of one day completing the report. The finished report was passed [and it gives the name] before being sent to Dave Smith. Report was sent to Dave Smith on 2 October late morning just prior to the second conference call.”

If we could scroll down, thank you very much:

“I spoke to Andy McLean on 5 October”, et cetera.

That’s where it ends, on 5 October.

The final paragraph says:

“In summary, our body of evidence is mature, so we’re well-placed to help Post Office today. But when ‘Horizon Online’ is installed in 2010, much of our existing material will become irrelevant, so allegations of system failures in the future may take more work in preparing evidence or explanations.”

So a body of work has been gathered and put together in order, it seems, to rebut or answer allegations of, for example, system failures.

We see, if we scroll to the top of the first page, please, it’s sent to you by Gavin Bounds, and he says:

“Duncan

“A heads up, in case questions from Roger and/or the client:

“I asked Suzie, RMG [account manager], to summarise our involvement insisting [the Post Office] rebut subpostmasters’ allegations (made public) of flawed data integrity caused by Horizon – leading to inaccurate accounts and thus monies owed. Please see below.”

Do you recall receiving this?

Duncan Tait: I don’t recall seeing it, I recall some of the things coming from it but I’ve largely relied on the document provided to me by the Inquiry.

Mr Blake: Relatively early on in your time at Fujitsu, do you recall somebody bringing to your attention concerns that are being raised by subpostmasters about flawed data integrity caused by Horizon?

Duncan Tait: Could you repeat the question again, please?

Mr Blake: Absolutely. Even if you don’t remember this specific email, the general topic, complaints from subpostmasters relating to data integrity issues and Horizon, was that something that you were aware of?

Duncan Tait: I must have been aware because I have this email in front of me but it was not a topic of conversation in the meetings I was involved with in my early days in Fujitsu.

Mr Blake: I’m going to take you, very briefly, to the report that’s referred to from Gareth Jenkins in this email. That’s at FUJ00080526. This is the report that’s referred in to in that summary, it’s entitled “Horizon Data Integrity”. It’s by Gareth Jenkins, we see there at the top it has both Post Office and Fujitsu logos. Do you recall that being quite a common thing for both parties’ logos to be placed on documents?

Duncan Tait: I think it would have been normal practice for whichever customer Fujitsu was engaging with.

Mr Blake: Thank you. If we scroll down to the bottom we can see the date at the very bottom. It has there, this particular version, 2 October 2009. If we turn over to page 5, please, it explains the “Purpose”:

“This document is submitted to Post Office for information purposes any and without prejudice. In the event that Post Office requires information in support of a legal case Fujitsu will issue a formal statement.

“This document is a technical description of the measures that are built into Horizon to ensure data integrity, including a description of several failure scenarios, and descriptions as to how those measures apply in each case.”

Were you aware that Fujitsu was providing information to the Post Office that related to Horizon data integrity?

Duncan Tait: I think I was generally aware that Fujitsu was assisting the Post Office.

Mr Blake: Thank you. Page 7, we can see the “Scenarios” are set out in this document. It says as follows:

“It should be noted that these scenarios are all to do with equipment failures, and these will always be visible to Fujitsu through the event logs which are retained.”

So it’s not a document that, in any way, goes into what we know as bugs, errors and defects; it only relates to equipment failures at this particular time.

Duncan Tait: Okay.

Mr Blake: So this isn’t a report that you were aware of?

Duncan Tait: No.

Mr Blake: No. Could we please turn to FUJ00156064. Can I just clarify, in relation to your earlier answer, were you aware that Fujitsu was at least providing some degree of assurance to the Post Office with regards to the reliability of Horizon data?

Duncan Tait: If I go to the email you showed me, the Suzie Kirkham email, it is clear in there there is some type of assistance being provided.

Mr Blake: Yes, relating to the Horizon system?

Duncan Tait: Yes.

Mr Blake: That is something that you would have been aware of in your early days/months, as Managing Director?

Duncan Tait: I think, Mr Blake, having that – I clearly received that email, so I must have read that email.

Mr Blake: Thank you. If we could start on page 2 of this document, please, the bottom email in the chain, this is an email from Suzie Kirkham to Gavin Bounds. Now, this is the same substance but is actually slightly updated, so I think the first one we saw was called, I think it may have been referred to as a draft, or something along those lines. It’s clear that, by 7 December, there has been some small amendments to that form of words?

If we scroll down, please, over the page, you’ll see that I took you to the bullet points before and 5 October was the final bullet point. There’s now one more bullet point, which says as follows, it says:

“I spoke with Dave Smith on 3 December and he mentioned that the Data Integrity issue had reappeared. It has been taken up by a Welsh MP who also happens to be a Barrister. He is threatening to bring an Early Day Motion in the House. Dave is meeting him in Parliament on Thursday, 10 December but at this stage didn’t feel he needed any attendance by Fujitsu. However, he was alerting us to the fact that this has reappeared.”

So in that timeline, amongst other things referring to the Gareth Jenkins integrity report, we’re now told that issue has been raised, not only, I think, there was earlier reference to newspapers but now also Parlimentarians; is that something you would have been aware of?

Duncan Tait: Could you just scroll back up, please?

Mr Blake: Absolutely. In fact, it may assist, if we go up a little bit more, we can see the chain. So it seems as though the same document, the same briefing has been sent to you again, the updated version, because you respond there on 9 December, saying:

“Okay, are you on top of this?”

So it seems as though you’ve been sent the updated version and are following that up.

Duncan Tait: Yeah.

Mr Blake: Is that something you recall?

Duncan Tait: So I’m not sure I would have had read the email. It looked like the previous email I’ve received, and then I reply all on here to ask are they on top of it.

Mr Blake: Yes. Can we scroll up, please, and I’m going to read you the rest of the chain. Ann Sinclair replies, sending to you, and she says as follows:

“Gavin – I’ll brief the Press Office. We should prepare an FAQ/statement to have in our back pocket if required, and I also want to explore doing some proactive work with them too, [for example] getting some positive stories out there, building some bridges with the journalists who might pick this up.”

Then above that, Mr Bounds emails Suzie Kirkham and he says:

“Suzie – can you liaise with Ann please.”

That’s Ann Sinclair; who was Ann Sinclair?

Duncan Tait: I think Ann Sinclair was the Marketing Manager for the Private Sector Division.

Mr Blake: Thank you. So within your division, you would have been her ultimate manager?

Duncan Tait: She had a dotted line to me and worked a hard line to the UK & Ireland Marketing Leader.

Mr Blake: Thank you. At this stage, you’re now not copied into this correspondence?

Duncan Tait: (The witness nodded)

Mr Blake: I’d like to read the above two emails, so the first one directly above says:

“Ann.

“Can we also have our Press Office hook up with the [Post Office] Press Office team on this too – I think this is hotting up – so we need to be in sync and both using aligned/supporting messages. Suzie – can facilitate your introductions here.”

This is the response from Ann Sinclair, sent to Gavin Bounds and also Suzie Kirkham. She says:

“Gavin – following discussions with our press folks and Suzie on Monday we have agreed that:

“We need to downplay this situation as much as possible, we don’t want to get too drawn in to the debate as we are only a supplier.

“There is a document that addresses all the technical questions that was produced for [the Post Office] for a meeting with MPs last week.

“We should not contact [the Post Office] Press Office.

“If press contact us, we will send them on to the [Post Office] Press Office and not comment [but]

“We will flag to Grayling, (our Public Affairs agency) to get them to keep their ears open for Parliamentary questions etc.

“We’ll keep an eye on this and if it looks like the situation is changing and/or becoming higher profile obviously we will review with you.”

Was that approach something that you knew about at the time?

Duncan Tait: No, it was not.

Mr Blake: Was it something, as the Managing Director of Fujitsu, should have been run past you, that kind of a strategy?

Duncan Tait: Mr Blake, we put in place, to run each of these businesses, senior executives and we expect them to be able to run their businesses accordingly.

Mr Blake: Who is the senior executive that would be responsible for this kind of a policy?

Duncan Tait: The Business Unit Director for Post Office was Mr Bounds.

Mr Blake: Mr Bounds, Gavin Bounds?

Duncan Tait: Yes.

Mr Blake: He would ultimately report to you?

Duncan Tait: Indeed.

Mr Blake: But it’s your evidence that, in terms of this kind of a strategy, downplaying the situation, it would be him who makes the call on that?

Duncan Tait: Indeed. I mean, I’m not copied so it’s difficult to say what they’re trying to downplay here.

Mr Blake: Yes. The email to you, though, that additional bullet point that I took you to, brings in a Member of Parliament is now concerned. Wouldn’t issues such as that – so matters affecting the press, Parliament – wouldn’t they be matters to raise with the Managing Director?

Duncan Tait: Probably. I’m not convinced I read that email as it looked exactly like the first email that I’d received.

Mr Blake: Yes, but it’s clear that Ann Sinclair has read that email and come up with a strategy and discussed it with Suzie Kirkham. Is that not something, given that it related to, for example, a Parliamentarian, something that – involving one of your biggest customers – that should have reached your level?

Duncan Tait: I think it depends on the situation.

Mr Blake: Looking at this situation, what is your view?

Duncan Tait: The situation from reading the email is that there is – there are no hints in here that the data integrity issues raised are real. There’s a reference that Ms Kirkham makes in her email to say that we have a strong body of evidence and there is a document produced to show how integrity is maintained in Horizon.

Mr Blake: Yes. We also have London News being interested, a Watchdog programme potentially on the horizon and also an MP interested. In those kinds of circ*mstances, we have your evidence that it didn’t ultimately go to you in terms of the strategy but, in terms of whether it should or shouldn’t have gone to you, what is your view?

Duncan Tait: Depends on the situation, if the situation –

Mr Blake: I’m telling you the situation.

Duncan Tait: If the situation is very, very serious and the team believes that they need my involvement in that, then I would expect them to escalate it. If they believed that there was no integrity issues and that then therefore this is something at play in the media but has no substance, then I don’t – there would be no need to involve me in that.

Mr Blake: Thank you. I’m going to move on now to early 2010, and the Horizon Online pilot. In 2010 you were still Managing Director?

Duncan Tait: Yes.

Mr Blake: Were you quite closely involved in the rollout of Horizon Online and the pilots of Horizon Online?

Duncan Tait: There were several accounts that needed my attention during that period when I joined as Managing Director, and Post Office was certainly one of them.

Mr Blake: Yes, I mean, compared to, for example, being the CEO and your increasing role in wider regions, when you were just Managing Director, just of the private company area, would you have been relatively involved in the pilot?

Duncan Tait: Yes, I think that’s fair.

Mr Blake: Could we, please, turn to FUJ00093031. We’re going to see that is a review that took place on the integrity of – we refer to it as Horizon Online, HNG-X. You’re not on the circulation list, you’re not an author, but I would just like to read some of the content to you and see if you are familiar. Are you familiar with this particular document it all, other than it being provided by the Inquiry?

Duncan Tait: I don’t think I’ve ever seen this but I can see it from information you’ve provided.

Mr Blake: Looking at the circulation list, who is the person that you would have liaised with the most out of all of those people or perhaps who is the most senior of the distribution list?

Duncan Tait: Maz Kostuch is probably the most senior person on that list.

Mr Blake: Did they have a direct line of reporting to you?

Duncan Tait: I think Maz did at that time, yes.

Mr Blake: If we scroll down, I’m just going to read to you a few paragraphs. So it begins with the terms of reference:

“Following the occurrence of a transaction being duplicated on the HNG-X branch database, Stuart Rye and Paul Roberts were asked to review the counter application architecture and design and ensure that it fully supports the need to protect the integrity of financial transactions.

“The scope is focused on the integrity of the Counter Application in relation to financial transactions captured at the Counter. It does not extend to data migration or other transient issues caused by the switch from Horizon to HNG-X.”

The “Background”:

“The objective of the [Horizon Online] programme is to develop a system with structural and operational characteristics that substantially reduce ongoing support and maintenance costs with respect to the current Horizon system.”

Just pausing there, were you aware that one of the objectives, or a key objective, of Horizon Online was, essentially, to save costs in the everyday operation?

Duncan Tait: Yes, I was.

Mr Blake: Thank you.

“A key component of Horizon Online is the Counter Application. In [reference] to the Horizon Counter Application, the [online] version retains operational data, (eg Reference Data) and business logic, but transactional information is stored directly in the Data Centre.”

I’ll take you to the next paragraph, it says:

“It is currently in pilot with nine branches.”

So, at this time, 2010, it was only in 12 branches.

Duncan Tait: Mm-hm.

Mr Blake: “On 28 January 2010, the Data Reconciliation Service process detected an error in a banking transaction. Subsequent investigations revealed that the branch database had two transactions with different [Journal Sequence Numbers] but the same [Session Sequence Number] for a specific counter on that day but the third party banking system only had one transaction. The clerk did not know that a duplicate transaction had been created.”

So reading that, it seems as though the person operating the Horizon platform would not have known that there was this error:

“An analysis of the database has revealed one other occurrence, again at Derby, but on a different day and involving a different clerk. This had not been detected by the [Data Reconciliation Service] as it did not contain a banking component and there there is no other business reconciliation which might have spotted it.

“The net effect would be that the Post Office and the branch records would not match. Where this happens, the Post Office investigates the branch and postmaster, with a view to retraining or even uncovering fraud. It would seriously undermine Post Office credibility and possibly historic cases if it could be shown that a discrepancy could be caused by a system error rather than postmaster/clerk action. [More] importantly, the central database as the system of record would be called into question.”

Were you aware, in broad terms, of issues cropping up in the rollout that had the potential to call into account the accounting integrity?

Duncan Tait: No.

Mr Blake: Were you aware of the potential for an issue with accounting integrity to affect, as we see there, Post Office Investigations?

Duncan Tait: No.

Mr Blake: Again, as the new Managing Director, why wouldn’t this have been brought to your attention?

Duncan Tait: I don’t know. What I do know is other issues were bought to my attention during the rollout but this was not.

Mr Blake: Reading that final paragraph, that is quite a significant paragraph, isn’t it –

Duncan Tait: It seems to be.

Mr Blake: – both for your relationship with the Post Office and also in relation to those complaints that we had heard about in that earlier correspondence?

Duncan Tait: So my understanding, Mr Blake, is this is about HNG-X and not about Horizon.

Mr Blake: Yes. Irrespective of whether this relates to Horizon Online or what we know as Legacy Horizon, the statement that is contained in that final paragraph is quite significant both for your relationship with the Post Office but also for individuals, any individuals, who are, for example, investigated by the Post Office?

Duncan Tait: Oh, without question, yes.

Mr Blake: Can we turn to FUJ00094392. If we start on the bottom email, please, and if we go over the page slightly, we can see this is an email from Jean-Philippe Prénovost; were you aware of who that was?

Duncan Tait: No.

Mr Blake: So he was legal counsel, it seems, within Fujitsu, so internal lawyer. He emails Alan D’Alvarez and he says as follows:

“Hi Alan

“Further to our discussion of Friday, please find below the two comments I had raised …”

This is commenting on the document we’ve just seen –

Duncan Tait: Okay.

Mr Blake: – and he says as follows:

“First paragraph, page 2 – The following section is potentially problematic [and he quotes there]: ‘It would seriously undermine Post Office credibility and possibly historic cases if it could be shown that a discrepancy could be caused by a system error rather than postmaster/clerk action. Most importantly, the central database as a system of record would be called into question’.”

So that’s the bit I just took you to. He says as follows:

“As discussed, there is no need to paint this in the worst possible light. I would suggest the following as being accurate without being unduly alarmist: ‘If it could be shown that a discrepancy could be caused by a system error rather than a postmaster/clerk action, it could potentially call into question the effectiveness of the central database as a system of record’.”

Quite significantly changing the meaning of that sentence; do you agree with that?

Duncan Tait: Yes. I’ve not seen this document prior to being shared by the Inquiry but –

Mr Blake: Yes. You’re not copied in. If we scroll up above, there’s an answer from Mr D’Alvarez and he says as follows:

“After review with legal (see email below) two amendments have been made to the documents and, in both cases, the sections referred to have been removed as they do not materially add to the primary purpose of the review which is to determine whether the solution, as designed would protect data integrity.”

As I say, you’re not on this email chain.

Duncan Tait: Mm-hm.

Mr Blake: Were you aware of a sensitivity within the business about these issues?

Duncan Tait: No.

Mr Blake: Again, would it surprise you, as Managing Director, not to be aware of these sensitivities?

Duncan Tait: With hindsight, yes, but that was not shared with me at the time.

Mr Blake: Looking at the recipients here, who would you have expected to have shared it with you?

Duncan Tait: So it’s largely – from what I can see – I don’t recognise all of the names – it’s largely a technical team. I would say probably Maz Kostuch, as I said before, is probably the most senior person.

Mr Blake: Were they on any of the kinds of committees that we’ve been speaking about?

Duncan Tait: Not to my knowledge.

Mr Blake: Could we please turn to FUJ00174290 and it’s the bottom email I’d like to take you to. We’re still with the pilot and rollout of Horizon Online, 6 April 2010. Thank you. So it’s the bottom half of page 1, please. Mr Bounds sends you a list of issues arising at that time. He says, as follows:

“Duncan, the new [Post Office] CEO, Dave Smith, started today. Mike Young mentioned before he went away that if/when the new CEO arrived he would likely be reaching out to Richard in his first few days in the role.

“By way of a briefing for Richard, please review the following:

“[Horizon Online] pilot was progressing well and moved into day 1 of high volume pilot (to 215 branches) on Thursday, 25 March. 208 branches were successful rolled out – a good outcome.”

It then says:

“Then began a catalogue of outages/issues as follows …”

It has a table of different issues: for example the first one we see in that middle column:

“Two [Horizon Online] service outages affecting all branches.”

If we look at the bottom entry there, there’s reference to a client meeting:

“The client stated at a meeting on 1 April that they would not allow High Volume Pilot to move ahead until:

“a. They had seen the findings of an independent report on our CS operations – giving them assurance that we were correctly resourced and had our events reporting under control [also]

“b. Fixes were deployed [for various issues].”

We see in the right-hand side of that, if we scroll up slightly that, in terms of the report on operations, you now have underway a report that’s being written by somebody called Rachel Daka. I think you’ve said in your witness statement that she wasn’t independent, in the sense that she wasn’t external to Fujitsu; you chose to pursue that internally?

Duncan Tait: That’s right.

Mr Blake: What was the reason for that?

Duncan Tait: My understanding was the Post Office Account team wanted to bring someone in with experience in Fujitsu who was independent of the team that was deploying Horizon Online and Rachael was – well, you can see here – the Operations Director for our Retail Business Unit.

Mr Blake: Number 3, there is reference there to Belfast data centres suffering a power surge and then we come to a list of things that are to be moved to red alert; can you assist us with what red alert was please?

Duncan Tait: As I recall, red alert was an internal process that account teams could engage with to bring more of the company’s resources to bear on the particular issue they were facing.

Mr Blake: There’s reference there to two major incidents, one with Horizon Network banking issues, another with MoneyGram issues. Below that, we also have other major incidents, debit card authorisation agent failed in a resilient pair; horizon Network banking issue; proxy radius server issue affecting ISDN sites.

I just want to read to you the paragraph two paragraphs below. He says:

“The above reflects significant issues we’ve experienced over a short time span.”

Just pausing there, were you aware of those kinds of issues being experienced in relation to the rollout of Horizon Online?

Duncan Tait: I would have been aware of, I think, most of these issues.

Mr Blake: “Relationships with the Post Office leadership are tense and we are clearly on the back foot. Dave Smith (as in the CIO that has just retired from [the Post Office]) takes with him a maturity of approach and firsthand experience of the original rollout of Horizon, his council to Mike Young and the [Post Office] ET was [that’s ‘Executive Team’, I think] was that there were many large issues back then and that these should be expected now …”

Were you aware, we’ve had a whole phase looking at the original rollout, were you aware of significant issues during the original rollout of Legacy Horizon?

Duncan Tait: No. I was not. Not at this time.

Mr Blake: It looks as though Dave Smith was trusted because he had experienced the first rollout and was likely to be more accepting of issues this time round. Is that – was that your understanding?

Duncan Tait: I’d never met Mr Smith, no.

Mr Blake: I think this was an email sent to you; did you have any thoughts on that at the time?

Duncan Tait: No, I did not.

Mr Blake: The reference to relationships with the Post Office leadership being tense, what was your understanding at that time?

Duncan Tait: I would – I think that’s about right. We were in the middle of a major rollout. That rollout was already significantly delayed and then we have all of these technical issues.

Mr Blake: Then it says:

“However, we do have a strong supporter in Andy McLean, the [Post Office] Service Director – whilst not pleased with where we are he advocates a logical cooperative ethic to overcome issues and is concerned by some of the more emotional reactions he is seeing within [the Post Office].”

What did you understand by “Emotional reactions”?

Duncan Tait: Well, had I have sat in the shoes of either a subpostmaster impacted by this, or on the Post Office side, when the rollout is in progress, I would have – I would have had a similar emotional reaction to it.

Mr Blake: “Dave Smith (from Parcelforce) started today, and has met with the [Horizon Online Post Office] team. Our contacts tell us that he is likely to take a more cautious stance towards restarting the pilot. The National Federation of SubPostmasters will not allow any more of their members’ branches to be migrated to [Horizon Online] for the time being. The likely way forward is that [the Post Office] will look to deploy [Horizon Online] to all their Crown Offices first, to prove that the system works and to persuade the Federation to continue.”

So it seems as though there were real tensions at this point about even whether Horizon Online was going to be rolled out to various subpostmasters around the country?

Duncan Tait: So I would agree with the significant tensions. I think the question was, when do you – at what point do you roll out Horizon to branches, as opposed to do you only partially roll out the new version of Horizon?

Mr Blake: Was that ever a threat from the Post Office, though, that they wouldn’t proceed full stop with Horizon Online?

Duncan Tait: So I remember meetings and correspondence with Mr Young and certainly some documents provided by the Inquiry, that Mr Young did raise the view with us that he would rather cancel the Horizon Online programme and he would go back to the previous version of Horizon. He did not want his operation messed up.

Mr Blake: Thank you. I’m actually going to take you to that correspondence now. Could we start with the FUJ00095628, please, and we’ll start on page 2. Thank you. There’s an email from yourself to Roger Gilbert and Gavin Bounds, and you say as follows:

“I spoke to Mike Young on Friday morning, he was in good spirits but remains very concerned about [Horizon Online].”

Mr Young has made two points. The first is:

“The programme was reviewed at Group level … with Mike Young, Dave Smith and the Group Legal counsel and FD discussing options. The legal counsel admitted they have few ‘levers’ to pull but want some reassurance. The Group input was based on the issues and experience they had with CSC.”

Are you able to assist us with CSC?

Duncan Tait: That would be Computer Science Corporation, now known as DXC.”

Mr Blake: Thank you:

“Mike gave a balanced view of Fujitsu – good relationship, excellent track record of stability, positively engaging with [Post Office] and made a difference to the business making its numbers that is years. However, he has doubts about our ability to wrestle the programme to the ground and they remain worried about the later releases of the software as they relate directly to [Post Office’s] ability to grow revenue. His words to me were that he has pressure on him to consider a plan B.”

Is Plan B what you were talking about before that, potentially, he may pull the plug on the whole thing?

Duncan Tait: He never made that clear. It was, I would say, a threat that was left dangling in the air.

Mr Blake: “Their confidence has been knocked due to:

“Ongoing issues with Oracle stability …

“The data centre outage.

“An outage caused by ‘Fujitsu operator error’ last week …

“Mike has asked for the following:

“1. Based on advice from Group Legal counsel Mike feels he wants some assurance that the [profit and loss] for the account is sustainable over the short and long term so they can see what we invest and provide the resources necessary to get the problems fixed. This will look like some form of an ‘open book’ arrangement.”

What do you understand by “open book arrangement”?

Duncan Tait: For Fujitsu to reveal every last cost item that there is assigned to the programme, and I think to the whole account.

Mr Blake: “2. He wants an independent review of the processes, tools and resource on the programme to assure themselves we are genuinely up to it.

“3. Finally, he wants Dave Smith to have some dialogue with …”

I think that’s Richard Christou?

Duncan Tait: Yes.

Mr Blake: “… so they can test the Japanese Board’s commitment to the account and programme (conference call or [video conference] would work).

“My view is it would be difficult, based upon where we are now, for us to resist 1 and 2 although there is some risk in those areas.”

So the initial discussions have taken place and your initial view is that, in fact, those first two would be difficult to resist. So the open book and the independent review; is that right?

Duncan Tait: That’s fair, yes.

Mr Blake: If we scroll up, please, to the first page. The very top of that at page, please. We see an email from Guy Wilkerson. Who was Guy Wilkerson?

Duncan Tait: I think he was a hybrid legal commercial person on the Post Office Account.

Mr Blake: He says and he’s responding there to Vince Fullwood, who I think has forwarded the earlier chain. He says:

“As discussed, this isn’t really a great surprise and I’m sure we’d be doing the same thing if things were reversed. As they suggest, they are not entitled formally to an Open Book Review in my opinion but this would be a confidence measure rather than a contractual arrangement on their part.

“They are hyper-sensitised to the stability issue …”

He then refers to the open book review wasting a lot of time, and it’s this final sentence that I want to ask you about. He says:

“An independent review will throw up all sorts of detail issues that can only delay the programme.”

Were you aware internally of concerns about carrying out an independent review at this stage?

Duncan Tait: So this is an independent review of the account’s financials, Mr Blake, if I read this email correctly.

Mr Blake: What do you think it’s limited to that? I mean, if I take you to the discussion – in fact, I’ll take you to the actual correspondence of Mr Young, so we can look at that.

Duncan Tait: Okay.

Mr Blake: But do you recall any reluctance to carry out any form of independent review at that stage?

Duncan Tait: So – well, I should be clear. My understanding of this, it was an independent review of the programme and not of data integrity, which I think is important, if I understand this correctly. Then, in terms of our concern, the concern would, certainly in terms of open book, have been another opportunity for Post Office to try to reduce Fujitsu’s fees or costs into them, which was a consistent theme of the conversations between the two organisations.

The other risk, I think, for us at the time, was the most important thing to do was resolve the Oracle issue and, diverting resources from the programme, then into an independent review, might have reduced their focus on what was the most important thing, which was the successful rollout, of the HNG-X programme.

Mr Blake: Let’s look at the subsequent correspondence between you. It starts at FUJ00095658. This is a letter to you from Mike Young, 10 May 2010, I will read to you a few passages. The second paragraph starts by saying:

“It was recognised during this review process that our relationship with Fujitsu is of long standing, has thus far proved fruitful to both parties and continues to play a pivotal role in the successful delivery of Post Office’s products and services.”

But he then goes on, in the next paragraph, to talk about his requests in relation to the Horizon Online programme. He says:

“We would very much like to see the executive correspondence within Fujitsu related to the recent Red Alert. This, we feel, would give us an understanding of how the Executive Management within Fujitsu are aware and responding to some of the problems we have seen in rollout.”

So one of his requests is a bit more transparency from Fujitsu. The second, he says:

“Additionally, we would like you to consider bringing in a qualified independent party and asking them to review and audit how the current programme is being run …”

This last half of the sentence is important, in the context of what you’ve just been saying:

“… as well as testing resource and skill levels both on the programme itself and other key initiatives that we have under way with Fujitsu.”

So it’s both looking at resources and skills of those who are running the programme as well as the overall programme itself; is that right?

Duncan Tait: That’s fair.

Mr Blake: Yes. Then your response is FUJ00096312. If we start on page 2, please – thank you – this is your response to that letter. So “Thank you for your letter”, it starts. Three paragraphs down, it says:

“Since your letter, I am extremely pleased with the progress that has been made. We have located the source of the troubles and taken steps to rectify the issues and we have now recommenced the pilot.”

Next paragraph:

“The cause of the issues that delayed High Volume Pilot was deficiencies with the Oracle product code.”

You’ve explained a lot about the Oracle issue in your witness statement, I’m not going to deal with that today. You say, at the end of that paragraph:

“At this crucial phase of the programme, we can see no benefit and will not be pursuing a third party review.”

So you are rejecting the proposal for an independent review at that stage.

Duncan Tait: Yes, it is, and my understanding is, between Mr Young’s letter and this, that between Post Office and Fujitsu, there had been an attempt to agree a review with a third party but it had not come to conclusion.

Mr Blake: Was that because of concerns within Fujitsu that an independent review would, in the words of Mr Wilkerson, throw up all sorts of detail issues that can only delay the programme?

Duncan Tait: I don’t believe so.

Mr Blake: What was your belief as to the reason why an independent review at that stage was not to be agreed to?

Duncan Tait: So during that period you have two things. You have about six weeks period of time-ish – you might correct me – where, between Fujitsu, Post Office and third parties to agree a scope and terms of reference, and that was not possible during that time.

I think the other thing, Mr Blake, is, by the time that this letter goes back from me to Mr Young, it’s clear what the real issue with the programme was and the real issue with the programme was the Oracle code, which has since been fixed.

Mr Blake: You then continue in this email:

“You will have seen the tremendous effort from Fujitsu.

“Thank you for your offer of assistance over Red Alert … that has now been lowered”, et cetera.

So, effectively, trying to close off the issues that Mr Young has raised in his letter is that a fair – or to say that they have already been addressed or don’t need addressing?

Duncan Tait: I think that we have taken measures to address the concerns around the programme, including the Daka review during that period of time, and that we’re now back – and it was clear, the real issue with this is the Oracle code and that’s now resolved and we’re able to deploy the pilot – sorry, deploy into high-volume rollout.

Mr Blake: Could we turn to page 1, please, and we have his response. He says:

“It won’t surprise you to learn that I am somewhat disappointed that it took so long to formally reply to my correspondence of 10 May and with the apparent ‘sea change’ on approach to some of our concerns. As my letter intimated, these letters of concern were brought to the fore in a Royal Mail Group Review of the current Horizon contract. My understanding from our weekly calls was that you had taken advice from KPMG as to how you could go ‘open book’ with us and therefore didn’t foresee a problem in doing so. On the issue of having a qualified independent party audit to evaluate Fujitsu Programme execution, along with staffing levels and skills base, I had been briefed that you had spoken to several entities to pursue this endeavour. Indeed, I was told you were close to agreeing terms with one of these. Additionally, in our calls you will recall I had asked whether there was a possibility of the Post Office ‘owning’ the terms of reference and again, this was something you were going to strongly consider.

“As it stands now, I feel I have been led down a journey on a number of months, just so that you can now say, ‘no’. This does not reflect well on our relationship and will not be well received in the next review. I have as a matter of course, been keeping both the Post Office Executive and the Group Executive aware of the progress I was told we were making in these areas.”

Just pausing there, the evidence that you’ve given in relation to your response was that things had changed, problems were over by then –

Duncan Tait: Mm-hm.

Mr Blake: – and that they weren’t necessary. It seems to have come as quite a surprise to Mr Young; were you aware of that?

Duncan Tait: I think – well, you can see from his – from his email to me that he is disappointed that we have, at that point, pushed back on his requests.

Mr Blake: There seems to be somewhat of a gulf between you as to whether matters are resolved or not resolved?

Duncan Tait: I would say, Mr Blake, the matters were resolved because the programme, at that point, was back up and running, and, as I said, the key area that was causing the issues in the programme here was the Oracle software code.

Mr Blake: He continues:

“It is now even more imperative that my Managing Director gets a view from the Japanese Board on just how they feel this relationship is progressing. We would like to see if the meeting between Dave Smith and Richard can be brought forward to a date closer than the current August date.

“In the meantime can I suggest you and I get together in person some time next week and talk thorough where we are.”

Were matters ever raised with the Japanese Board along the lines proposed here?

Duncan Tait: My understanding is Richard was aware of the issues we were facing with Post Office and was supportive of a meeting with Mr Smith and Mr Young.

Mr Blake: Are you aware of that taking place?

Duncan Tait: I vaguely recall that it did.

Mr Blake: Can we, please, turn to FUJ00096238. If we scroll down, please, thank you, we can see Andy McLean. Who was Andy McLean?

Duncan Tait: I’m not quite sure.

Mr Blake: Okay. He is emailing Gavin Bounds and raises issues with costs that are being incurred by the overrun. If we scroll over to the first page, we’re in the same time period – we’re actually slightly back in time now.

Duncan Tait: Okay.

Mr Blake: We’re on 18 June. This is American format, so it should be 18 June 2010, and it’s from Mr Bounds to you, and he says:

“I will be sending this to Andy McLean at [the Post Office] later today.”

It’s headed “Without Prejudice”, and he says, for example:

“We are greatly encouraged by the recent restart on [the] pilot rollout and we are hopeful that the programme will now move forward to a successful and uninterrupted conclusion. Despite this, it is acknowledged that getting to this point has caused us to move beyond the period covered by the last arrangements made regarding the schedule and, like you, we would like to discuss this to ensure our financial position is clear.”

I just want to read to you that penultimate paragraph there. He proposed to say:

“I have had confirmation from Duncan [regarding] his and Mike Young’s conversation, unfortunately no such agreement was reached. Just to be clear, while I can sympathise with the intention behind your suggestion, Fujitsu is not contractually liable in any way, any measures agreed without prejudice would have to be very carefully considered – [so] you know such a precedent if set by [the Post Office] to its subpostmasters might make [the Post Office] liable for compensation to subpostmasters in all future cases where the service is interrupted …”

Just pausing there, it seems as though you’ve had a conversation with Mike Young about potentially providing some sort of compensation or money to those subpostmasters who were affected by problems in the rollout; is that right?

Duncan Tait: So my understanding is that Mr Young and I had a conversation where we left with different views of the same – of the same conversation, and Mike was under the impression that we would pay compensation directly to subpostmasters.

Mr Blake: Yes. This draft being sent on a without-prejudice basis, looking at this and looking at the earlier emails that I’ve taken you to, it seems as though, in June of 2010, things were quite bad between yourselves and the Post Office, potentially leading even to litigation. Is that your recollection?

Duncan Tait: I don’t know if, at that time, it would have been as tense as earlier on in 2010.

Mr Blake: So there was a worse time in 2010?

Duncan Tait: I think the early part of 2010 was difficult for both – was difficult for both organisations and for subpostmasters.

Mr Blake: Again, is that due to issues during the rollout –

Duncan Tait: Yes.

Mr Blake: – technical issues affecting subpostmasters?

Duncan Tait: (The witness nodded) Yeah.

Mr Blake: Sir, I think that’s an appropriate time to take our first afternoon break.

Sir Wyn Williams: Okay.

Mr Blake: If it could be for ten minutes, please.

Sir Wyn Williams: Yes. So where does that take us to?

Mr Blake: 2.50, please.

Sir Wyn Williams: Fine, yes.

Mr Blake: Thank you very much.

(2.38 pm)

(A short break)

(2.51 pm)

Mr Blake: Thank you, sir, can you see and hear me?

Sir Wyn Williams: Yes, thank you.

Mr Blake: Excellent.

Mr Tait, just to summarise where we are, we went to a document in 2009 and I think the position was you recognised that there were complaints from subpostmasters relating to integrity and that you were broadly aware of those, albeit not necessarily paying much attention to the particular emails that I took you to; is that right?

Duncan Tait: I think that’s fair.

Mr Blake: Then 2010, we’ve seen issues with the pilot and the rollout, and tensions between the Post Office and Fujitsu in respect of that.

Duncan Tait: That’s also true.

Mr Blake: Could we, please, turn now to FUJ00174378. We’re still in 2010 but now we’re in the summer of 2010, 22 July 2010, so a month after the documents that we were just looking at. You are sent an email from Gavin Bounds to yourself and others, entitled “Channel 4 [documentary] next week [regarding Post Office] and our Horizon system – heads up”. It says as follows:

“[Post Office] has just informed us that they are commenting back to Channel 4 on a documentary to be aired next [Friday regarding] the plight of a few subpostmasters who have claimed that Horizon (our system) was the cause of financial irregularities that led to them losing their jobs. This appears to be related to Horizon and not HNG-X and also are not related to the service interruptions we experienced during March/April.

“[Post Office] will send us the comments they have made tomorrow. Verbally [Post Office] has confirmed to us that these cases are known to them and they see no cause for concern. In case we are approached – as usual – we should refer all questions back to the [Post Office] PR team.”

Do you recall receiving this email?

Duncan Tait: I do not.

Mr Blake: Do you recall, in general terms, there being a Channel 4 documentary in July 2010?

Duncan Tait: I didn’t watch it.

Mr Blake: Do you recall there being a documentary at that time, learning about it around that time?

Duncan Tait: I received the email, Mr Blake, so I must have been aware at the time.

Mr Blake: Mr Bounds, he wasn’t a technical expert at Fujitsu, was he?

Duncan Tait: No.

Mr Blake: Could we, please, turn now to FUJ00156195. Very similar time, we’re now on 5 August. If you scroll down to the bottom of page 2, please. Thank you. We have an email from Roger Gilbert to you and Mr Bounds asking for you and Gavin to provide a brief on what follows below. Can you assist us with who is on the distribution list below, please, where they are, which office they are in?

Duncan Tait: Sure. So Mr Kamata was essentially Mr Christou’s Chief Financial Officer; Brian Harris, I think was – at that point would have been a – was previously Richard’s CFO and was now in some type of business assurance role; I don’t know who Matsuzawa-san is, Mr Matsuzawa.

Mr Blake: So are they based in the Japanese part of Fujitsu or are they based in the UK?

Duncan Tait: I think, at that point, Mr Kamata would have been based in London, Mr Harris would also have been based in London, I don’t know where Matsuzawa-san was, and the others the other Japanese people I don’t know, it looks like they were based in London. Roger Gilbert was my boss in London; Steve Clayton was, I believe, Roger’s CFO based in London; Richard Christou, at that point, was probably on his way to Japan or already being in Japan; and Philip Oliver, I believe, was also based in London.

Mr Blake: Thank you. The author says:

“Although it is not clear if we are involved in this matter at this moment, I would like you to work with Roger and his team to clarify what is going on. This article has been already picked up by [Fujitsu] Tokyo.”

We will scroll down and see what the story is but, when it says “picked up by [Fujitsu] Tokyo”, typically how would that happen?

Duncan Tait: I guess Fujitsu Tokyo would either have picked up something in the media or would have been informed by Fujitsu in Europe or very occasionally a customer might have written directly to senior executives in Japan.

Mr Blake: Thank you, if we scroll down, we can see that it’s a news article, “Post Office faces legal action over accounts IT”, and it refers there to Accountancy Age. It says:

“Accountancy Age has learned a group of subpostmasters have joined together to bring legal action against the Post Office. Court papers are expected to be filed in the coming weeks.

“The action originates with the Justice for Subpostmasters Alliance and is over the use of [Fujitsu] accounting software made for the Post Office by Fujitsu.

“A number of subpostmasters have lost their positions over alleged accounting irregularities, while some have also faced fraud allegations in the courts.

“But the subpostmasters claim that errors in the system software are to blame.”

If we scroll down to the bottom of that page, it says:

“The JFSA has expressed concern that the accounts of any subpostmasters have not been examined for up to eight years, which it believes would highlight the system’s problems.”

At the bottom of the page, it says:

“Allegations about Horizon first appeared in October last year when 30 subpostmasters came forward …”

Then it has at the bottom, “IN OUR VIEW”, so that’s in Accountancy Age’s view, if we scroll down to the bottom of the page, please:

“IN OUR VIEW

“Rarely has there been a more pressing need for a forensic accountant to audit an accounting system. With a High Court battle on the cards, and various smaller courts around the country all calling for an audit, the Post Office now faces compelling claims to undertake a serious audit of its IT. The argument is becoming almost impossible to ignore.”

If we go back to page 2, please. Just below that, we have the CEO of Fujitsu sending this to you and to the COO, Gavin Bounds, asking for a brief. Then we have, on page 1, the brief. I’m going to take some time to take you through this email. So Mr Bounds has sent it to you:

“Roger/Duncan …”

So to the CEO and to you:

“Summary – no cause for immediate concern, this is the latest in a long line (even preceding automation) of articles and/or challenges to [the Post Office] regarding its accounting systems.”

He sets out the Fujitsu position:

“Post Office owns relatively few of the actual post office branches in the UK, most of the branches being effectively franchises. Postmasters are mainly paid based on the number of transactions of each type that they perform. Post Office takes a fairly firm stance with any accounting discrepancies to prevent fraud but there is a steady stream of court cases and almost weekly stories in the minor or local press covering those cases.

“Fujitsu is obligated to support Post Office, where requested to do so, by either providing system information to support the cases or, in some cases, expert witnesses to testify as to the measures within the systems to ensure that the data being relied on is as originally entered. This has been going on for a number of years with little incident.

“As reported in the article, recently accused postmasters have become more organised and a case in West Byfleet is being used to test potential arguments.”

That’s the prosecution of Seema Misra.

Duncan Tait: Yes.

Mr Blake: “We have been providing information and an expert witness at Post Office’s direction. The outcome so far is understood to be that neither Post Office nor Fujitsu has been found to be at fault although the judge has left open the possibility that if there is an error anywhere, it is only likely to be in the processes which are Post Office’s. The defence counsel is currently using this to request further system information but the general view is that he is fishing for problems rather than having any particular proof of error.”

The next paragraph:

“Post Office is handling the case and all communications with the public … [Post Office’s] position (validated yesterday and today) is that they are not going to respond to this article on the basis that Accountancy Age only has a small circulation – although they are also aware that it is on the web. Their view is that if they respond to every article on this topic it only as credence to the claim. Post Office also stated that they are confident that the integrity of the Horizon system is secure. They will always investigate every case that is raised by the subpostmasters and to date they have never found the system to be flawed. If necessary, Post Office will fight each individual case through the courts. In all formal responses to these allegations, Post Office never mentions Fujitsu unless they are asked to provide an expert witness.”

I just want to read to you this final paragraph:

“They did recently issue a private statement to Channel 4 …”

So that’s the Channel 4 programme –

Duncan Tait: Okay.

Mr Blake: – that was mentioned in that earlier email:

“… after which they withdrew a programme they were planning on the subject.”

So the Channel 4 notification on the 22 July seems to have not have taken place –

Duncan Tait: Okay.

Mr Blake: – it seems to have been withdrawn:

“This is included below and has been released to us on the basis that we do not circulate this beyond those executives with an immediate need to know.”

This the private statement that was released to Channel 4:

“As discussed here is a copy of the statement that was sent to Channel 4 News the other week. I am happy for you to use this in order to address the concerns of your executives in Japan …”

Just pausing there, do you recall concerns being raised by executives in Japan at this stage?

Duncan Tait: So I don’t know. I’m assuming this refers to the Japanese people referenced in the email or in communication with the Post Office. I don’t know.

Mr Blake: Did you at this stage have any communications with executives in Japan about –

Duncan Tait: I didn’t, Mr Blake, but my reporting line was through to Mr Gilbert, then he reported to Richard Christou and Richard Christou was on the Executive Committee of Fujitsu in Japan at that time.

Mr Blake: “… however, I need to ask that this doesn’t get circulated around Fujitsu or appear in any way in internal publications – this is because [Channel 4] didn’t run the article so our statement [hasn’t] been publicly released.”

Their statement said:

“Virtually all the UK’s 12,000 post office branches operate entirely professionally, using the Horizon system, without any accounting discrepancies and without accumulating abnormal debts, and it is clearly in the interests of both our customers and the vast majority of subpostmasters that in the very few instances where there is evidence that the finances of a branch are not properly managed or where money has gone missing, Post Office Limited must fully investigate, and take necessary action, including legal action in the last resort. The decision to prosecute is not taken lightly and in every case where action has been taken no court has found evidence to believe that the Horizon system’s integrity to be deficient.”

Just pausing there, we’re now in August 2010. By that stage, were you aware that Post Office was prosecuting subpostmasters based on Horizon data?

Duncan Tait: Yeah, I’m not sure I was.

Mr Blake: Even on receiving this?

Duncan Tait: Even on receiving this.

Mr Blake: I’ll read to you the final paragraph of that statement, they say:

“‘We are continuing to upgrade the system to make sure it meets the growing demands of the financial services products provided by today’s post offices. Whilst implementing changes it will inevitably have caused some inconvenience, it has not in any way affected the integrity of the system, which is fundamentally more accurate and less open to abuse than the old-fashioned paper based systems it replaced’.

“Finally, Post Office does not publish details of prosecutions of subpostmasters.”

Mr Bounds continues, he says:

“It is also worth noting that Horizon is due to be retired and replaced by [Horizon Online] in the next month or so – this is primarily for cost saving reasons and was not driven by any technical problems with Horizon. This is unlikely to prevent similar investigations into the replacement system at a later stage.”

So bringing everything that we’ve been looking at together, within your first year at Fujitsu, you were aware of complaints from subpostmasters relating to Horizon integrity, correct?

Duncan Tait: Yes.

Mr Blake: You were aware of publicity in trade magazines and in other articles as well?

Duncan Tait: Yes.

Mr Blake: You were aware of Fujitsu providing some support to the Post Office, albeit unclear the extent of that support?

Duncan Tait: Yes.

Mr Blake: It didn’t register with you that that included prosecution support at that stage; is that right?

Duncan Tait: Also true.

Mr Blake: I think in your witness statement, you’ve said that you only vaguely recall this particular issue; is that right?

Duncan Tait: That is also right.

Mr Blake: Given that it’s been raised, picked up by Fujitsu in Tokyo, given all of the details that we see here, why do you think it was not a significant issue on your particular agenda?

Duncan Tait: Because, if I go back to the emails when I first joined the company, it’s evident from the Chief Operating Officer of the Post Office that he says Horizon is great, stable and the users have nothing but praise for it. You can see that in some of the documents you’ve provided for me. The Suzie Kirkham note is clear that we have – that Fujitsu has a strong body of evidence that there are no integrity issues. And then, when you get each of these events, like the Channel 4 programme you referred to and this, it’s made clear by senior executives inside Fujitsu, and I think, also as I said from the customer, that there is no issue.

Mr Blake: In quite a few places in your witness statement you rely on assurances from the Post Office that there aren’t issues.

Duncan Tait: Yes.

Mr Blake: Isn’t that looking at it from the wrong way round?

Duncan Tait: No, I don’t believe it is.

Mr Blake: We saw, for example, in 2009 Gareth Jenkins providing that Fujitsu integrity report. So there’s certainly information going from Fujitsu to the Post Office to reassure them about the integrity of Horizon. So isn’t saying Post Office didn’t raise any problems, isn’t that the tail wagging the dog?

Duncan Tait: My view, Mr Blake, is system integrity relies on two fundamental components: the first one is that the supplier must do their utmost to make sure that system works and to monitor it accordingly and, at the same time, it is the responsibility of the customer also to take seriously the issues that are raised by their customers. And when you put those two things together, as it did for the vast majority of customers that I engaged with, that worked.

So it is the responsibility of both organisations to make sure that this system works and to engage with each other genuinely and openly when there are issues.

Mr Blake: In terms of your organisation, providing that reassurance, where were you getting that from?

Duncan Tait: I was getting that up the line but, if I take a step back, so I could have been made aware of integrity issues in a number of ways: so our governance processes, through escalations up through the line, either the technical line or the business line that reported to me, and I was getting blanks from each of those particular lines, where I could have been alerted, or more to the point, I was being given a reassurance.

Mr Blake: Who by?

Duncan Tait: Well, you can see some of the names we’ve discussed so far, who have been referenced in the documents so far today.

Mr Blake: We’ll look at more but let’s say at this stage who, in particular, are you getting reassured by?

Duncan Tait: Well, I’d say, so far, principally, you can see two people. You can see Mr Bounds and you can see Mr Young.

Mr Blake: So Mr Bounds from the Fujitsu side and Mr Young from the Post Office side?

Duncan Tait: Yes.

Mr Blake: Could we please turn to FUJ00174417. We’re now in February 2011. You’re still Managing Director, you haven’t yet become CEO at this stage?

Duncan Tait: That’s right.

Mr Blake: An email from Mr Young to yourself and also to Stephen Long and it says:

“Guys

I need you to take a look at this if you haven’t seen the programme already.”

He forwards you the link to the Inside Out South programme. He says this:

“Undoubtedly, Horizon integrity remains a core to our safe operation and, to date, nothing has surfaced that suggests there is any evidence that the system is flawed in any way. Can we briefly just talk through these latest developments.”

Now, first of all, “Guys”, quite an informal, close relationship, it seems?

Duncan Tait: I’m not sure I would call my relationship with Mr Young close in a chummy way, and you can see from some of the documentation this morning that it was the opposite of that at times.

Mr Blake: Who was Stephen Long? Can you remind us?

Duncan Tait: So if my memory serves me correctly, at this point, Mr Bounds has moved off the Post Office Account, post-the successful deployment of Horizon Online, and is doing another role inside the Private Sector Division, and he has been replaced by Mr Stephen Long.

Mr Blake: Thank you. The Inside Out South report is the Nick Wallis report where it begins with looking at Seema Misra’s case, so the case that we’ve already seen referenced in that email.

Duncan Tait: Yes.

Mr Blake: She was in prison at the time, it has her husband crying in that programme; it then moves on to Jo Hamilton’s case and interviews her; complaints about your product, the Horizon system; also interviews with Parliamentarian James Arbuthnot expressing his concerns. I think you’ve said in your statement that you don’t recall watching that programme; is that right?

Duncan Tait: That is right.

Mr Blake: Again, the Managing Director of a company that provides a system that is at the centre of the complaints linked to a BBC article – so not just now a small trade magazine of any sort, a respected national broadcaster –

Duncan Tait: Yes.

Mr Blake: – why is it that you wouldn’t have looked at that?

Duncan Tait: I think it’s in that the paragraph, just underneath the link to the iPlayer, in the second line, you can see – well, sorry, let me read:

“… nothing has surfaced to suggest there is any evidence that the system is flawed in any way.”

Mr Blake, this isn’t from someone relatively junior in the Post Office; this is the Chief Operating Officer of the Post Office.

Mr Blake: But the reporting is about your product. How is it that you don’t have curiosity about what the BBC are saying about your own product, irrespective of what the client is saying?

Duncan Tait: Mr Blake, I think I showed curiosity in my job day to day and had this have had a sense in here that I should have dug further, after being reassured now on several occasions there were no issues, this does not tell me, “Duncan, you need to take a deeper look into this”. Particularly, I am being reassured by a very senior customer.

Mr Blake: We saw at the very beginning that chart that showed the important customers for Fujitsu, the £30 million plus customers: a very small number of customers. Was there regular reporting about your other customers that’s critical of your product?

Duncan Tait: I would have issues raised to me quite regularly and, depending on how they came to me and my assessment then from what I saw, I would intervene. I intervened during this period of time, personally, on a very serious issue with Thompson Reuters, which meant that we ended up between the two of us cancelling our agreement.

I remember another issue with a customer where there’d been one issue in an account balance in about 10 years that was escalated to me and that was one issue in 10 years, and we resolved that issue within about three weeks.

Mr Blake: Had those been raised by Computer Weekly, you being a computer firm; had they been raised by the BBC, the national broadcaster?

Duncan Tait: On the second example I gave to you then, no, it hadn’t, because the customer had spotted the issue with an account balance and brought it to Fujitsu’s attention. On the first matter, I believe the Thompson Reuters issues were in certain trade press, but I can’t recall.

Mr Blake: Here we are, the BBC having an entire episode dedicated to the cases of subpostmasters, including one who was currently in prison. On reflection, was that not a link that you should have pressed, not just in hindsight, but simply knowing what you knew at the particular time?

Duncan Tait: I wished I had looked at this. It might have given me a different perspective. But, at the time, both through my – the line through to me and the line from the customer to me, and our business assurance systems, there were no red flashing lights that said I should get involved any more than I did.

Mr Blake: Do you not see that as a lack of curiosity at this time, given that you were sent that link?

Duncan Tait: No, because of the sentence that’s immediately underneath the link.

Mr Blake: I’m going to take you to some documents that are around the same kind of time, so we can see what was going on at Fujitsu around that time. Can we start with FUJ00081527. So this is 11 February. It’s a report that has been written by Gareth Jenkins on what is known as the receipts and payments mismatch bug, “Introduction”:

“The purpose of this note is to document a request we have had from Post Office in terms of presenting details of what happened as a result of a bug in [Horizon Online] in September 2010 which caused a receipts and payments mismatch and also resulted in discrepancies being lost.”

Just pausing there, before you made a distinction between issues relating to Legacy Horizon and Horizon Online, now we have an issue with Horizon Online.

Duncan Tait: Okay.

Mr Blake: Rollout has taken place by this time:

“The background to this is the fact that there was a BBC documentary broadcast on Monday, 7 February 2011 reporting on postmasters being unhappy about being pursued for losses by postmasters on Horizon.

“It should be noted that the issues described here relate to [Horizon Online] and that the implementation of the accounting mechanisms in the two systems is totally different (but they do produce the same reports and support the same business process).”

If we go over the page, there is a summary of what the receipts and payments mismatch is. The first bullet point says:

“There will be a receipts and payments mismatch corresponding to the value of discrepancies that were ‘lost’.

“Note that if the user doesn’t check their final balance report carefully they may be unaware of the issue since there is no explicit message when a receipts and payments mismatch is found on the final balance …”

Then three bullet points:

“The local suspense will have no knowledge of this specific discrepancy.

“The opening figures for the discrepancies in the new period will be zero rather than the actual value of the discrepancy.

“[Third] The data used for the BTS will also have a zero value for discrepancies at the end of the period. When the BTS is produced, this will result in a similar receipts and payments mismatch.”

At the bottom of the page here, it says:

“The problem appears to have affect 62 branches and details have been provided to Post Office Limited of all the BTS and SU Rollover Reports for these branches until they were clear of the issue.”

Looking at this, it seems as though certainly Fujitsu were aware of a bug that affected accounting integrity in 62 branches; would you accept that?

Duncan Tait: Yes.

Mr Blake: Was this something that you were aware of at the time?

Duncan Tait: I was not.

Mr Blake: Could we please turn to POL00028838. This is an earlier report from 2010 on the same issue: the receipts and payments mismatch issue. Can you assist us, in terms of the attendees, were there any there who were sufficiently senior to report to you?

Duncan Tait: No.

Mr Blake: We can see for example, Mike Stewart, “Fujitsu SDM”; can you assist us with what the “SDM” might be?

Duncan Tait: That I believe stands for Service Delivery Manager.

Mr Blake: Thank you. So none of those people would report to you. Would they in some way be in the reporting line to you, though?

Duncan Tait: This is in 2010, I think you were saying.

Mr Blake: Yes.

Duncan Tait: No, the way Fujitsu UK were structured then was that the technical resources worked for outside of my line, so they reported – there were two divisions that I think were relevant to Post Office. There was the Applications Division and there was a division called CORE. This where all the technical and monitoring people who run the services, they were based in those two divisions, I run private sector, and those three divisions report directly to Mr Gilbert. So the technical people would not report to me until I was made CEO of Fujitsu.

Mr Blake: So up until April 2011, they wouldn’t report to you but, by April 2011, they would all report to you.

Duncan Tait: That is true.

Mr Blake: Yes. This is detailed in the other note that I’ve taken you to, the later note, but I’ll just go through a few points in this, and this is a document the Inquiry is very familiar with, “What is the issue?”:

“Discrepancies showing at the Horizon counter disappear when the branch follows certain process steps, but will show within the back end branch account. This is currently impacting … 40 branches.”

So in 2010 it was only 40 branches and then the number seems to have grown on the –

Duncan Tait: Yes, okay.

Mr Blake: Can we go over the page, please, “Impact”:

“The branch has appeared to have balanced, whereas in fact they could have a loss or a gain.

“Our accounting systems will be out of sync with what is recorded at the branch.

“If widely known could cause a loss of confidence in the Horizon system by branches.

“Potential impact upon ongoing legal cases where branches are disputing the integrity of Horizon data.

“It could provide branches ammunition to blame Horizon for future discrepancies.”

If we scroll down, we see there various solutions that are proposed, and one that the Inquiry has looked at in quite a lot of detail is that first solution, Solution One, and that was:

“Alter the Horizon branch figure at the counter to show the discrepancy. Fujitsu would have to manually write an entry value to the local branch account.

“Impact – When the branch comes to complete next trading period they would have a discrepancy which they would have to bring to account.

“Risk – This has significant data integrity concerns and could lead to questions of ‘tampering’ with the branch system and could generate questions around how the discrepancy was caused. This solution could have moral implications of Post Office changing branch data without informing the branch.”

Now, this is the 2010 document, and we’ve also seen the 2011 document.

Duncan Tait: Yes.

Mr Blake: As Managing Director in 2010, or as CEO in 2011, would you have expected that the receipts and payments mismatch issue would have been brought to your attention?

Duncan Tait: I would expect discrepancies of this nature to have been raised up the line inside Fujitsu, yes.

Mr Blake: Would you have been expecting them to be raised along the line to you?

Duncan Tait: Yes.

Mr Blake: Is that both in 2010 and in 2011?

Duncan Tait: Yes.

Mr Blake: Why do you think it was that it wasn’t raised with you?

Duncan Tait: I do not know. And it looks – and Mr Blake, I can – just to make sure I understand the document correctly, this also looks like this is Post Office personnel on here as well as Fujitsu personnel –

Mr Blake: That’s correct.

Duncan Tait: – and that could have triggered an escalation, either up the customer organisation or up the Fujitsu line.

Mr Blake: Yes, and doesn’t appear to have?

Duncan Tait: No.

Mr Blake: We’re still looking at exactly the same time period. Could we please turn to FUJ00156432. You’ll recall the receipts and payments mismatch document from Gareth Jenkins was 11 February 2011.

Duncan Tait: Yes.

Mr Blake: The first one that I took you to. I’m going to be sticking to 11 February 2011, and we have there another report that has been drafted by Gareth Jenkins and this is in relation to an ongoing court case. It says:

“I have been asked by Post Office Limited to produce a [report] to ‘Technical expert’s report to the court prepared by Charles McLachlan, a Director of Amsphere Consulting Limited’, which I received on Thursday, 11 February 2011.”

I think it is your evidence that you had no idea, at this time, that that was going on, that Mr Jenkins was at assisting in court cases providing evidence, responding to, in this case, an expert’s report.

Duncan Tait: Yes.

Mr Blake: That was the case of McQue. Could we please turn to POL00329433. We’re still on 11 February. It seems quite a busy day. POL00329433. This is a letter produced by the Criminal Law Division of the Royal Mail Group to a defendant in a criminal case, so that’s Ms McQue, Carlisle Crown Court:

“As you are aware when the matter was last before the court the court ordered a final defence expert report”, et cetera.

If we go down to the bottom of the page, it makes clear in this letter that:

“Although the prosecution and defence experts have endeavoured to produce a joint report this cannot be agreed.”

So the experts have produced their reports and they’re in disagreement about the Horizon system?

Duncan Tait: Yes.

Mr Blake: Could we please turn to FUJ00156443. We’re still on 11 February. I’m not suggesting you saw this particular document at all. This is Post Office –

Duncan Tait: Okay.

Mr Blake: – correspondence, a Royal Mail correspondence.

Again, more Royal Mail correspondence, this time in the case of Humphrey, same date. The letter says as follows:

“Both defendants pleaded guilty on 11 December 2009, however the calculation of the total loss was disputed and the case proceeded to a Trial of Issue …”

That finally came before the court and it outlines there the sentence that was imposed. So Mr Humphrey was sentenced to 27 months’ imprisonment; Mrs Humphrey was sentenced to 18 months’ imprisonment. If we scroll down please, we can see in the letter the lawyer from Royal Mail says:

“This is another case where Horizon was challenged which resulted in a considerable amount of additional work by Gary Thomas. His efforts, together with those of Gareth Jenkins (Fujitsu), are evidenced by the successful outcome in this case.”

So it’s very clear that on 11 February, or on or around 11 February, there is direct assistance from Fujitsu –

Duncan Tait: Yes.

Mr Blake: – in relation to criminal prosecutions, and I think it’s your evidence that you weren’t aware of that?

Duncan Tait: That is also true.

Mr Blake: Could we turn to FUJ00153750. This is all – even this email, the end of this chain, is the same date – 11 February 2011.

Duncan Tait: Okay.

Mr Blake: So this is still while you are Managing Director of the private part of Fujitsu –

Duncan Tait: Yes.

Mr Blake: – with Post Office as one of your main clients?

Duncan Tait: Yes.

Mr Blake: If we please turn to page 3., back to 7 February, so the day of the BBC broadcast, and this Penny Thomas; did you know Penny Thomas?

Duncan Tait: No, I did not.

Mr Blake: No? She, if we scroll down, was a Security Analyst at Fujitsu. She is emailing colleagues. If we scroll up we can see to Gareth Jenkins, and others. We have already seen Jean-Philippe Prénovost’s name, I think he was a lawyer. Do you recognise any of those names at all?

Duncan Tait: I think the only name that would have been somewhat familiar at the time would be Guy Wilkerson.

Mr Blake: Why would his name have been familiar?

Duncan Tait: I think he was based in London.

Mr Blake: Penny Thomas says as follows, she says:

“All

“There was an interesting article featured on the local radio station, BBC Surrey, this morning and I listened while travelling to work.

“Misra, a convicted subpostmistress, now pregnant and serving a jail sentence in Bronsville [sic] Prison for theft and false accounting from the West Byfleet Post Office and 55 other subpostmasters/mistresses are planning to take civil action against the Post Office because of the flawed accounting system used at the Post Office outlets. There are to be 6 test cases, South Warnborough was identified as one.

“There was an emotional interview with Davinder Misra (the husband) who stated that the system was losing money right from the beginning, they couldn’t find the problem, and neither could the auditor who was sent from the post office.

“A spokesperson from the Post Office stated that the Horizon system was ‘absolutely accurate and reliable and all times’. Robust testing procedures had been undertaken.

“Jonathan Lord, MP for Woking is concerned and will ensure a full financial investigation, absolutely independent, is carried out. He stated that the processes which the Post Office employed where discrepancies arose should be fair, and conducted in a prompt and proper way; these Post Office procedures are to be looked at closely.”

If we scroll up we can see that Jean-Philippe Prénovost has sent that on to David Jones, who was, I think, the Head of Legal at Fujitsu; is that right?

Duncan Tait: I think the Head of Legal at that time would have been David Roberts and Mr Jones would have reported directly to him, I think.

Mr Blake: Thank you. He says:

“Further to Penny’s email below, we’ve been informed that [the Post Office] are making noises about commissioning an independent evaluation of the Horizon system with a view, presumably, to putting all integrity issues to bed once and for all.

“The team is not at all inclined to accept this request (especially bearing in mind that the system is now defunct) but they have sought official guidance on how they should deal with the request. Given the link with ongoing/potential litigation, are there any particular issues you will be concerned about and would like to raise at this stage?”

So Penny Thomas, from this, a security analyst, has heard the BBC report.

Duncan Tait: Yeah.

Mr Blake: I think you said you weren’t even aware of the report, other than the link being sent to you; is that right?

Duncan Tait: That is right.

Mr Blake: Were you aware, at this stage, of the Post Office making noises about commissioning an independent evaluation of the Horizon system?

Duncan Tait: I was not.

Mr Blake: Is that surprising, given that you were the Managing Director of a division where Post Office was one of your key clients?

Duncan Tait: I had regular meetings with Post Office, as I think the Inquiry can see, and I would have imagined they would have brought that up with me.

Mr Blake: Is it strange that a lawyer within Fujitsu would be aware of that but you would not be?

Duncan Tait: I just – I don’t know, Mr Blake. You’d have to ask them.

Mr Blake: If we scroll up, please, email from David Jones, saying:

“Hi – have you looked at the contract and our security service obligations? I expect there will be some cooperation obligations …

“Who is making the request from [the Post Office] and is it at the right level of engagement?”

If we scroll up above:

“Hi David,

“The suggestion (I understand it has not been officially requested) has come directly from Mike Young (the highest level of engagement).

“We are of course aware of the contractual obligations and, as this does not form part of them, the team would be more interested in any other considerations.”

So it seems as though the request has come directly from Mike Young, he was one of your direct liaisons, wasn’t he?

Duncan Tait: Yes.

Mr Blake: So how is it that you were not aware of that at this time?

Duncan Tait: I don’t know.

Mr Blake: I mean, something seems to have gone fundamentally wrong at Fujitsu for this level of information not to be provided to you, hasn’t it?

Duncan Tait: I would have expected Mike to come to me or the then leader of the Post Office Account from Fujitsu with that request.

Mr Blake: Is it likely that he did go to the leader of the Post Office Account and it simply hasn’t, for some reason, been raised with you?

Duncan Tait: There is a possibility of that but I just don’t know.

Mr Blake: If we scroll up, the response is:

“You are aware that we have or had a banking indemnity in place that would mean, if I recall it properly, that if the outcome of the investigation were adverse that Fujitsu might have some liability to [the Post Office].”

Pausing there, as Managing Director, would it not have been important for you to have been aware that potentially Fujitsu was on the line for some liability in respect of these issues?

Duncan Tait: I think our view, or certainly my view, would have been, if there was an issue with the software that’s causing counter balance issues, which then leads to people being prosecuted, it didn’t matter what the consequences were; we should have got to the root cause of that.

Mr Blake: Why, as at 11 February 2011, do you think that wasn’t happening?

Duncan Tait: I do not know.

Mr Blake: Then he raises clause 16, and 16.3, says:

“Fujitsu Services shall offer all reasonable assistance to Post Office in preventing fraudulent use of the services, the HNG-X development, the Associated Change Development, the Horizon Service Infrastructure, and the PostShop infrastructure by Post Office’s employees and agents.

“Surely this means we can’t refuse their request in any event …”

So it certainly looks as though, within the Legal Team, they think that if the Post Office are requesting an independent investigation, you couldn’t refuse that request.

If we scroll up, there’s just a discussion of whether or not that means that Fujitsu can refuse.

Duncan Tait: Okay. Mr Blake, I think around this time, if I may, I was also involved in a negotiation with another customer that did involve Fujitsu exiting an account, and cost about £38 million. It was the right thing to do for both the customer and for Fujitsu. It generally takes a more rounded view to come up and – to a conclusion on a purely legal view.

Mr Blake: What is the relevance of that?

Duncan Tait: Well, the relevance of that is that, where there were issues, Fujitsu faced up to them.

Mr Blake: But it seems, from your account, you weren’t aware of the issues?

Duncan Tait: I was not aware of – I was not aware of this –

Mr Blake: I mean, we’ve seen –

Duncan Tait: – on Post Office –

Mr Blake: – article, after article, after article, how can it be that, at this stage, you weren’t aware; what went wrong?

Duncan Tait: It is difficult to – it’s difficult to say – for me to comment. We had good governance in place, we had good, open lines of communication with the customer, we had the opportunity to escalate up and down the organisation, so difficult for me to say.

Mr Blake: You’ve got here people who were actually involved in the prosecution of subpostmasters, so we’ve got Gareth Jenkins, Penny Thomas, all in this email chain, all aware of the BBC reporting. So they had been involved in Seema Misra’s case, as an example?

Duncan Tait: Right.

Mr Blake: How can it be that somebody from that team didn’t raise it up to the Managing Director?

Duncan Tait: I do not know how it did not come to my attention, nor up the other line to the then CEO of Fujitsu, to Roger’s attention either.

Mr Blake: We’ve looked at a lot of correspondence from 11 February. I’m going to stay with 11 February and I want to look at correspondence that was actually going to Paula Vennells at the Post Office.

Duncan Tait: Okay.

Mr Blake: So could we start with FUJ00174418. All this is is a covering email. You’ve seen the draft letter to Paula Vennells, you address it in your witness statement.

Duncan Tait: Okay.

Mr Blake: FUJ00174418 is simply a covering email from Charles Matcham, who was within your division; is that correct?

Duncan Tait: Yes, he was.

Mr Blake: “Draft Letter to Paula”:

“Needs work but you get the idea …”

It was sent to you and others. I’d like to take you – so that’s same day, 11 February 2011, so the same day as all of these other things that I’ve been showing you –

Duncan Tait: Yes.

Mr Blake: – were going on. A day when Gareth Jenkins wrote those two reports that we’ve seen?

Duncan Tait: Yes.

Mr Blake: A day when there’s various discussions going on about an independent investigation being carried out and whether that has to take place. The day when Royal Mail is drafting memos about success being down to, amongst other things, Gareth Jenkins’ efforts from Fujitsu.

Duncan Tait: Okay.

Mr Blake: Let’s look at the draft letter. That’s FUJ00174419:

“Dear Paula,

“I thought the timing was appropriate to write to you and inform you of our plans and objectives for the account and take the opportunity to introduce the two senior executives appointed to support your business and lead on behalf of Fujitsu.”

It continues, I won’t read it all, but perhaps we’ll look at the paragraph that begins:

“Back in August 2010 I attended a video conference with your predecessor … Amongst other important matters, a paper previously submitted to David was discussed and endorsed. The brief document set out the principles of working jointly to explore the mutual benefits of developing our existing Horizon Online contract to ensure future alignment to Post Office strategic plan.”

So discussing potential future avenues of business.

Duncan Tait: Yes.

Mr Blake: “… Fujitsu has proactively invested in the development of a compelling proposal through a dedicated team working out of our Centre of Excellence in Slough. Our intention is to present our proposition to you in early March and gain your agreement …

“To facilitate this Fujitsu has assigned two senior executives …”

Then it goes into or proposes a brief summary of their experience and expertise, as set out.

If we scroll over the page you can see it’s been drafted in your name.

I think you say in your witness statement that you recall sending a letter along these lines.

Duncan Tait: I do.

Mr Blake: Yes. The focus in that letter is on future work together, isn’t it?

Duncan Tait: It is.

Mr Blake: There’s nothing in there about recent press reporting of the type that we’ve just been seeing?

Duncan Tait: I agree.

Mr Blake: There’s nothing in there about complaints from subpostmasters about accounting integrity or anything along those lines; is that right?

Duncan Tait: That is right.

Mr Blake: Nothing in there about prosecution support?

Duncan Tait: That is also right.

Mr Blake: Could we please turn to POL00017555. I’m sticking now with what you might call general picture at the time. You’re not copied into this email, this isn’t something you would have seen at the time, but just to see the kind of work that, on 14 February – so a few days later – Gareth Jenkins was involved in. We’re still on the case of McQue and he is referring to the expert reports. He says:

“That is the information I have given to Charles about Callendar Square.”

Were you aware of the Callendar Square bug at this time?

Duncan Tait: No.

Mr Blake: “I have not sent him anything further since it is irrelevant to this case (as he accepts). However his point is that if we had an accounting discrepancy in Callendar Square, then that implies that it is possible to have an accounting discrepancy in Rinkfield”, which is the particular branch.

Duncan Tait: Okay.

Mr Blake: “I have to accept that that is possible. However the Callendar Square issue as such is irrelevant in Rinkfield and this is accepted by Charles.”

So an acceptance there by Mr Jenkins that the bug in Callendar Square is essentially relevant, insofar as it implies that it’s possible to have an accounting discrepancy elsewhere, even if that particular bug is not the one in play.

Duncan Tait: Okay.

Mr Blake: Okay. But these weren’t issues that you were in any way aware of in 2011?

Duncan Tait: You are right.

Mr Blake: Could we turn, please, to POL00017555.

Sorry, actually, I’m going to move on to – so you became CEO in April of that year?

Duncan Tait: Of 2011, yes.

Sir Wyn Williams: Mr Blake, I’m getting a bit anxious about when the second break is –

Mr Blake: Yes, that is actually a convenient time. So we could take it now.

Sir Wyn Williams: Yes.

Mr Blake: Could we come back just before 4.00?

Sir Wyn Williams: Yes.

Mr Blake: Yes, 3.57, please. I need those three minutes, if that’s okay.

(3.47 pm)

(A short break)

(3.57 pm)

Mr Blake: Thank you.

Mr Tait, I’m going to move to 2012, so about a year into your time as CEO. Could we please look at FUJ00168511. 13 April 2012. Gavin Bell, who is, I think, a member of the client Executive Team; is that right?

Duncan Tait: Yes.

Mr Blake: He has met Paula Vennells on the train and spoke about number of points and it’s the third point I’d like to draw your attention to. He says:

“She then asked about some of the recent systems incidents and transaction integrity. I have provided a very high level response of how the Reconciliation Service we provide catches any issues and offered her and Lesley Sewell a visit to Bracknell to meet [the] team. She then went on to say that she has had enquiries from Oliver Letwin MP … and James Arbuthnot … about system outages and a [Freedom of Information] request on a particular subpostmaster. She said that she might invite Duncan to a meeting with these MPs when she meets them next.”

Do you recall that, within that time during the first year of your time as CEO, the key client was raises issues to do with Horizon integrity?

Duncan Tait: If that question, Mr Blake, is do I recall this conversation with Mr Bell, I do.

Mr Blake: Did that make you take any additional steps? We’ve heard that no investigation had taken place at Fujitsu up until that point. Did that trigger any particular investigations?

Duncan Tait: Again, I think if you read the second sentence in that paragraph, it’s “I provided a very high level response about how the Reconciliation Service catches any issues”. So I think, from reading that, that sentence, that doesn’t say to me that we need to take any further investigation.

Mr Blake: But, if your key client raises in that particular conversation, issues to do with transaction integrity, was that not something, given all the history we’ve been through already, something to look into a bit further at that stage?

Duncan Tait: If Ms Vennells was not satisfied with Mr Bell’s response to her questions, I believe they were on the train, then she could have come directly to me.

Mr Blake: Can we turn to FUJ00168523. We’re in June 2012 at the bottom email, please. “Urgent Post Office BBC”. You email Simon Carter; who was Simon Carter?

Duncan Tait: By then, I believe Simon Carter would have been the head of marketing for Fujitsu UK.

Mr Blake: “… there’s an article on BBC regarding Post Office and concerns over the Horizon system. It’s an old allegation which I believe is totally false, however, it is on the news.

“Can you alert the IB …”

What was IB?

Duncan Tait: That was the – Fujitsu was split in – essentially then, into Japan and outside of Japan, and the bit outside of Japan was called International Business or IB.

Mr Blake: “Can you alert the [International Business] and Japanese teams please. I suggest we ensure that we are aligned with [Post Office] press team and also have a drawer statement ready to go.”

Drawer statement, is that not suggesting something new, but a standard statement?

Duncan Tait: I think it is a pre-prepared statement, is the way I understand drawer statements.

Mr Blake: “It is an old allegation which I believe is totally false …”

Did you, at that point, instigate any new investigations internally?

Duncan Tait: I don’t believe, as a result of this, no.

Mr Blake: That’s another BBC report, national report, on Horizon integrity. I’m going to take you to another report, six months later. Can we please turn to FUJ00174576. News Summary, if we scroll down, sticking to that page, Wednesday, 2 January:

“Computer Weekly – Post Office admits that the Horizon system needs more investigation.

“… Years of struggle from campaign groups has forced the Post Office to look again at a computer system which has been blamed for subpostmasters being wrongly accused of false accounting. Despite numerous complaints the Post Office has consistently stated that there is no fault with the Horizon system. But [subpostmasters] claim problems with the technology could be generating unexplained losses.”

We see at the top of the page, please, an email from you to Helen Lamb. Who was Helen Lamb?

Duncan Tait: Helen Lamb, at that point, would have been running a division called Business and Application Services, which is where the Horizon code would have been run out of.

Mr Blake: “Helen, what’s this POL stuff about please?”

Do you recall the answer to that?

Duncan Tait: I don’t recall the answer. I vaguely recall sending the email but don’t recall the answer.

Mr Blake: In your statement, and today, I’ll read a few passages from your statement.

Duncan Tait: Okay.

Mr Blake: You know the evidence you’ve given today but you said, for example, “I received repeated assurances”, Post Office was confident internally, and Post Office reassured you?

Duncan Tait: Yes.

Mr Blake: We’ve seen here article, after article, after article, mentions of Members of Parliament, BBC, Computer Weekly, you being a computer company. Did you ever, in that period, seek to investigate whether there was any substance in those reports: a significant investigation, not just reassurance from an individual?

Duncan Tait: Yes. Mr Blake, I’d go back to what I said before, that when I joined, I had the Kirkham email that brought – stated no issues. The recollection – the email from Mr Bounds after his meeting with Mr Young, that said Horizon was great, stable and that the users only had praise for it. And then when each of these media events happened during 2010/early 2011, you can see in those – in each one of those, it is no cause for concern, no cause for immediate concern, no flaws in the software from Mr Young’s email to me in early 2011. It would have been unusual, I think, to have conducted further research at that point when you had that level of reassurance.

Mr Blake: Why would the national media be so wrong about it? I mean it’s like Groundhog Day. It’s year, after year, after year, exactly the same thing comes up. There’s a national report about Horizon integrity, and all there is is an email with a line that says everything is okay. Why wouldn’t you, as Managing Director, and then CEO, not actually put in place a significant investigation into that issue?

Duncan Tait: Mr Blake, we had good governance in place. We had delivery assurance in place. We had assurance teams to govern new customer opportunities and the extensions of Horizon over time. We had Audit and Risk Committees in place and each one of these could have brought to the attention of the – to Fujitsu’s CEO prior to me and during my period, that we needed to do something about it. Now, with hindsight, we absolutely should have done something about it because the media were absolutely spot on.

Mr Blake: Could we please turn to FUJ00168649. That summer, there was a meeting with Paula Vennells:

“Detailed below is a readout from the meeting between Duncan and Paula last night.”

I don’t need to take you into any detail in that. I mean, there’s no mention there of Horizon integrity issues. Is that likely, is that your recollection of those kinds of discussions you had with Paula Vennells?

Duncan Tait: Yes. Yes, what you’re saying is true.

Mr Blake: Again, it’s very much focused on new initiatives, looking forward, rather than looking back at past problems.

Duncan Tait: Pretty much. I think in the operations section, you can see that Paula praised the high quality of our operational performance, so that is a here-and-now comment, not about the future.

Mr Blake: Can you turn to FUJ00174662, and this the briefing note for that meeting. There’s a section on business as usual operations. If we scroll down, new initiatives, scroll down, CSR. There’s a section on risk over the page. Priorities and then risks. Nothing in the risks section about issues with Horizon integrity or complaints from politicians or the media. The only point in this that relates to those kinds of concerns is the very bottom. We can see at the bottom of the page there is reference to Second Sight:

“A number of queries have been raised, all of which have been answered and no irregularities identified. One allegation is proving more challenging relating to a suggestion that alterations to the branch database holding subpostmaster balances could be made on Fujitsu premises.”

So that’s the remote access issue:

“We have been asked to provide further details related to systems controls/access and audit records for balance corrections. This will be available next week.”

So, again, no significant issues being raised in that meeting. Do you recall any meeting between you and Paula Vennells at which serious issues relating to complaints from subpostmasters or relating to the integrity of Horizon were raised?

Duncan Tait: The time I recall would have been when Ms Vennells said that she would – she had had complaints around integrity and would have to commission an independent review.

Mr Blake: What was your response to that?

Duncan Tait: This goes back, Mr Blake, to what would have happened with other customers, that if they’d had concerns over integrity that would have been a very sensible thing to do. I mean, I don’t recall the exact details of the conversation but that Fujitsu would provide assistance as necessary.

Mr Blake: Can we turn to FUJ00174708, please. It’s the bottom of the page. We’re now in July 2013, and there is a report from your meeting, it says:

“Duncan met Paula Vennells this morning to discuss the role of Horizon in [the Post Office]’s future strategy and the IPR issue.

“As part of that Duncan shared the contents of his brief [including]:

“Horizon is an invested and stable platform

“Very low cost …

“Second Sight has shown it to be safe, secure

“Benchmarked

“We have an industry littered with disasters of service outages, programmes taking twice as long as planned with massive costs where organisations have replaced systems …

“There was quite a lot of discussion around this and Paula said … ‘that all sounds good but why do my team tell me that working new reference data through the system take a long time and the platform is not agile’.”

Then it sets out some responses. Just pausing there. Do you recall ever giving bad news to Paula Vennells about the integrity of the Horizon system or bugs, errors and defects with the Horizon system?

Duncan Tait: I don’t think any of my briefs gave me data that that would have pushed back on Ms Vennells in that regard. I think you can see, Mr Blake, in other conversations that Ms Vennells and I had, that they were robust.

Mr Blake: As robust as the system? When you say they were robust, I mean, let’s look at that penultimate sentence:

“I’m not sure if this is a difficult task or not but as you well appreciate we have to respond to this with some urgency and the story needs to be good.”

The suggestion being that one of your most important clients needs to be told a good story and that there is some reluctance within the company to share bad news. Was that something you experienced or not?

Duncan Tait: No, we had very robust conversations between the two organisations and my understanding is this here refers to the agility of the system.

Mr Blake: We can see the response. That’s at FUJ00174721:

“Paula

“Thank you for taking the time to meet me on Thursday [this is 8 July] …

“Overnight pricing changes are now possible …

“We also have made good progress ‘opening up Horizon’.”

Then I’ll take you to the final paragraph:

“As I followed up on the questions you raised it became evident to me that close collaboration between our teams is working well. Horizon is evolving at pace to better position the Post Office for [enhancing] agility and growth. Therefore, it might be worth organising a briefing for your key executives on Horizon’s new capabilities and planned enhancements.”

It’s again looking to the future and what can be achieved from Horizon.

Given all the things that we’ve discussed, all those newspaper articles, media reports, why do you think it is that we don’t see those kinds of matters being raised in depth and discussed between you, real concerns, you reassuring Ms Vennells, for example, about issues of system integrity; do you think those exist, those emails?

Duncan Tait: I don’t know, Mr Blake. Can I just check the date of this exchange, please?

Mr Blake: This is 8 July 2013.

Duncan Tait: 8 July 2013, and the Second Sight investigation is up and running at this time?

Mr Blake: Yes.

Duncan Tait: And I have the previous month had an email from a James Davidson, the talks about the initial findings from Second Sight, and it is another reassurance for me about how Horizon is working.

Mr Blake: But these are all external reassurances. Nothing within Fujitsu. Nothing has been set in train within Fujitsu to investigate those various complaints, and nothing being passed from you to Ms Vennells about reassurances regarding the system.

I mean, let’s look at the response. If we turn to FUJ00174724. 8 July, this is the response at the bottom that’s been sent on Paula Vennells’ behalf. The series of emails that the Inquiry has seen to date are all looking at small improvements perhaps, looking at future work together but there doesn’t seem, certainly from what we’ve seen so far, to be any detailed correspondence between you and your equivalent at the Post Office about these Horizon integrity issues.

Is that, do you think, because they don’t exist or because we haven’t yet seen them and do they exist? What is your recollection of this period of time?

Duncan Tait: I don’t believe there is email correspondence between Ms Vennells and I regarding integrity issues but I don’t know.

Mr Blake: What about the media reporting and those issues that are raised there, complaints from subpostmasters? Do you think that was ever discussed in-depth with your – with Ms Vennells?

Duncan Tait: I don’t believe that was discussed between me and Ms Vennells.

Mr Blake: The various emails we’ve seen today about bugs, errors and defects, you’ve said you weren’t even aware of them, let alone being able to pass those on to Ms Vennells?

Duncan Tait: I agree.

Mr Blake: Two very quick topics, the first is prosecution support.

Sir Wyn Williams: Before we get there, Mr Blake, the 8 July, actually, Mr Tait is the date that Second Sight published its Interim Report. Was that sent to you on or about that date?

Duncan Tait: I’ve never seen the report, sir, only a feedback from members of my team based upon what Post Office personnel – I think Ms Sewell – had given them.

Sir Wyn Williams: Right. All right, thank you.

Sorry, Mr Blake. Carry on.

Mr Blake: Not at all.

Prosecution support. Did you know that Fujitsu provided what we know as ARQ data, audit data, to the Post Office?

Duncan Tait: Not until after I left Fujitsu.

Mr Blake: What was your understanding of the role of Gareth Jenkins while you were at Fujitsu?

Duncan Tait: I was not aware of Mr Jenkins’ role while I was at Fujitsu.

Mr Blake: Could we turn to POL00382242, please. This is a Post Office document, so I don’t expect you to have seen this document but it is a brief for a meeting with yourself on 11 November 2013. I believe you’ve only seen it very recently.

It’s the final page I’d like to take you to and the last two paragraphs. Were you aware of something called Project Sparrow at the Post Office?

Duncan Tait: I don’t believe so.

Mr Blake: Within this brief, it says:

“The Post Office Criminal Law Team needs to find an independent expert to give evidence about the Horizon system which was previously provided by Fujitsu’s Gareth Jenkins.

“Lesley and Susan Crichton have raised this with Fujitsu. The Legal Team have a meeting arranged with Fujitsu to discuss this requirement, this will happen on 21 November. Following this we will have a better understanding of Fujitsu’s view, any impacts and what the next steps will be.”

First of all, do you recall a meeting on 11 November 2013?

Duncan Tait: I don’t, no. I do remember, at the time, we had an issue with this home phone and broadband contract that was causing a great deal of tension between Post Office and Fujitsu.

Mr Blake: I think you’ve said you don’t even recall any issues with Gareth Jenkins. Do you recall, at a meeting, anybody raising with you the need for a new independent expert?

Duncan Tait: I do not.

Mr Blake: Remote access, and I can deal with that very briefly. You address it at paragraph 102 of your witness statement. I’m not going to turn to that.

Duncan Tait: Yes.

Mr Blake: When did you first become aware of the ability for Fujitsu to remotely access subpostmasters’ branch accounts?

Duncan Tait: Mr Blake, I would say, in systems like this, having a facility called “remote access” or “privileged access” would have been necessary because problems can occur in systems like this that would need fixing. So I would say generally aware from when I first became involved in Fujitsu.

Mr Blake: Can we turn to FUJ00174422. I’m just going to take you to two documents from 2011.

Duncan Tait: Okay.

Mr Blake: This email is 1 June 2011. Do you recall, in 2011, Ernst & Young recommending a review of what was called privileged access?

Duncan Tait: I recall Ms Vennells asking me for our organisation to take action against the EY audit in preparation for the next Board meeting.

Mr Blake: Yes. So we have, in this email that’s sent to you:

“The audit referred to in Mike Young’s mail was part of the annual audit carried out on Post Office by Royal Mail Group auditors Ernst & Young.”

It sets out the main points. It says:

“In general, Ernst & Young were satisfied with the robust user management processes for HNG-X system access. However, observations were made of the user management processes, specifically with regard to the segregation of duties between developer and system administrator roles. It was recommended that a review of privilege access is undertaken and that the processes around user management are strengthened.”

In your statement, you then refer to another document, and I’ll just take you to that. It’s FUJ00174428, and it’s a reference to a meeting with Paula Vennells. It says, “Info”. If we scroll down slightly, it says:

“DT is meeting Paula Vennells and Mike Young on 18 August – the agenda is the Ernst & Young audit. It was a key challenge for [Ernst & Young] to audit a shared service generally. We were really proactive in helping them through this.”

You recall having a meeting with Paula Vennells to discuss this issue?

Duncan Tait: I’m not sure I do but I do recall Ms Vennells raising the EY audit with me and asking Fujitsu to resolve the issues prior to her next Board meeting.

Mr Blake: I think you say in your statement that you tasked Mr Bounds with this; is that right?

Duncan Tait: Yes.

Mr Blake: Were you aware of that review actually taking place?

Duncan Tait: The EY review, or the consequent Fujitsu review?

Mr Blake: No, the consequent Fujitsu review.

Duncan Tait: My understanding is that that review and the actions were put in place and successfully executed.

Mr Blake: Who do you recall carrying out the review?

Duncan Tait: I do not know who conducted the review.

Mr Blake: Did you see the review once it had been completed?

Duncan Tait: I did not.

Mr Blake: Did you check to make sure that it had been undertaken?

Duncan Tait: I did.

Mr Blake: You did?

Duncan Tait: I believe so. I would have managed this by exception and, if Mr Bounds or the team had not – had had issues, then they would have spoken to me about it.

Mr Blake: So is it likely that there will be a document in existence that is around this time, reviewing the issue of privileged access?

Duncan Tait: My understanding is there should be some documentation that shows Fujitsu taking action based upon the EY report, though I’m not sure I’ve seen it, Mr Blake.

Mr Blake: Thank you. One final document. It’s POL00024828. If we could start on page 5, please. The Inquiry has seen quite a lot of correspondence about the issue of remote access in 2014/2015 and we can see, on page 5, a response from 2014 that had been provided by Fujitsu. The summary is set out just below. I’ll just read out the first bullet point and that’s a summary of Post Office’s understanding of the position based on the responses that had been provided below from Fujitsu:

“There is no ability to delete or change records a branch creates in either old Horizon or Horizon Online. Transactions in both systems are created in a secure and auditable way to assure integrity, and have either a checksum … or a digital signature … are time stamped, have a unique sequential number and are securely stored via the core audit process in the audit vault.”

Were you aware of a dispute between the Post Office and Fujitsu about the information that Fujitsu had given relating to remote access?

Duncan Tait: I was not.

Mr Blake: If we scroll up, we can see there’s an email, an internal email within Post Office, so, again, you wouldn’t have seen it. It’s page 4, the bottom of page 4. It’s an email from Jane MacLeod to Andrew Parsons, so internal lawyer to external lawyer. She says as follows:

“Separately, Paula has suggested that she speaks to the UK CEO of Fujitsu (Duncan Tait), and my suggestion would be that she:

“Alerts him to the fact and timing of the response letter …”

This is a response letter in the litigation.

Duncan Tait: Okay.

Mr Blake: “Notes that the question of remote access is still a live issue and major concern to the claimants

“Notes the work being undertaken by Deloitte to review access rights and controls

“Expresses the desire that [Fujitsu] (continue to) work constructively with Deloitte and flags that if the Deloitte work uncovers a different position to that which [Fujitsu and Post Office] have publicly stated over the years, then we will need to consider carefully how to manage the impact …”

Duncan Tait: Okay.

Mr Blake: Did a conversation ever take place with Paula Vennells relating to remote access?

Duncan Tait: I’ve no recollection of that conversation.

Mr Blake: Were you aware at all of the issue of the Post Office placing blame on Fujitsu for giving an incorrect answer in relation to the issue of remote access?

Duncan Tait: Not to my recollection.

Mr Blake: My final couple of questions.

The litigation, more broadly: were you aware of Gareth Jenkins’ role in the civil action and the Group Litigation?

Duncan Tait: No, I was not.

Mr Blake: Did you ever have any discussions with anybody about whether he should or should not be, for example, a witness in that litigation?

Duncan Tait: I did not.

Mr Blake: Have you experienced Fujitsu employees being concerned about being used to give evidence in that Group Litigation?

Duncan Tait: No.

Mr Blake: Thank you. Thank you very much, Mr Tait. Those are all of my questions.

Duncan Tait: Thank you.

Mr Blake: There are ten minutes of questions from Mr Stein. Thank you.

Questioned by Mr Stein

Mr Stein: Mr Tait, I’m going to take you to a document which is FUJ00080526. Can we go straight to page 5, please, of that document. Thank you.

Now, this document is dated 2 October 2009. It’s drafted by Gareth Jenkins, entitled “Horizon Data Integrity”. Okay?

Duncan Tait: Okay.

Mr Stein: It’s a document we know you’re familiar with, as you dealt with it, as you were asked to look at it by the Inquiry, and you refer to it at page 13, paragraph 36, of your statement. Okay?

Now, this document had a circulation list that included Suzie Kirkham who you’ve mentioned a couple of times. She’s someone that, when you came into your role, she drew to your attention the fact that there were issues that were ongoing in the press in relation to claims –

Duncan Tait: Yes.

Mr Stein: – about the integrity of the Horizon system. Okay?

Duncan Tait: Okay.

Mr Stein: We also know it’s a document that is shared between Fujitsu and the Post Office. All right.

Now, this document, I’ll summarise it. At no part of this document is a mention of software bugs, errors or defects. It pretty simply says things along the lines of: if you turn off the system and bring it back on, what happens. It is very technical in that sense.

Duncan Tait: Okay.

Mr Stein: It doesn’t deal with software issues or bugs. Now, did you notice that when you read through this document after it had been brought to your attention?

Duncan Tait: So, Mr Stein, you’re right: I only saw this in preparation for the Inquiry, and it seems to be quite a technical document that describes how integrity is ensured in Horizon Online. But I had no other recollection than that.

Mr Stein: Right. Well, take it from me: it doesn’t refer to software bugs.

Now, your background work has been in relation to IT systems; do you agree?

Duncan Tait: Yes.

Mr Stein: Sometime ago, but that’s what you’ve done in the past.

Duncan Tait: (The witness nodded)

Mr Stein: Now, all large-scale systems, such as Horizon have software bugs, don’t they?

Duncan Tait: They do.

Mr Stein: Right. In relation to the Horizon system, Fujitsu operated a service line at four levels. Part of those levels were to do with the fixing of software bugs, issuing patches, notifying the Post Office of those bugs as it went along; do you agree?

Duncan Tait: I agree.

Mr Stein: Right. So why do you think that this report from Mr Jenkins does not mention bugs?

Duncan Tait: I have no idea, Mr Stein. I think it would be a question for Mr Jenkins.

Mr Stein: Right. Well, let’s go to the mismatch bug document, please. The document is familiar to this Inquiry. POL00028838. Can we go to the bottom of page 3 of that document. Can we have a look at Solution One. Can we just refer to that, please.

Now, you’ll see it’s being said here that there are three potential solutions to apply to the impacted branches and then the recommendation is that Solution Two should be progressed. Now, this is a joint meeting, as you pointed out to Mr Blake, between the Post Office and Fujitsu, all right?

Duncan Tait: Yes.

Mr Stein: It’s not, as an example, a note of a meeting in a pub after a few drinks, okay?

Duncan Tait: Okay.

Mr Stein: It’s a proper meeting between two large organisations: one a worldwide brand and the other one is a very well-known UK brand. So let’s have a look at the solutions:

“Solution One – Alter the Horizon branch figure at the counter to show the discrepancy. Fujitsu would have to manually write an entry value to the local branch account.

“Impact – When the branch comes to complete next trading period they would have a discrepancy which they would have to bring to account.

“Risk – This has significant data integrity concerns and could lead to questions of ‘tampering’ with the branch system and could generate questions around how the discrepancy was caused. This solution could have moral implications of Post Office changing branch data without informing the branch.”

All right?

So we can see what’s being said here. Let’s put it fairly crudely, if you don’t mind. This basically says one of the possible solutions could be, “Let’s fix the branch accounts without telling the branch subpostmaster and see if we can get away with it”. Now, is that what you expect of Fujitsu staff members, to even consider this as being an option?

Duncan Tait: No, it is not.

Mr Stein: No. Try it the other way round. Are you slightly surprised about the Post Office considering this as a possible option in relation to fixing a branch account for one of their subpostmasters?

Duncan Tait: I would give you the same answer.

Mr Stein: Let’s move further up the page, please, to the bottom of page 2, I think it is, “Impact”. Now, let’s have a quick look at the impact section. So this is the impact of this branch. Now, the mismatch bug, we all know – I’ve described it in earlier questions for other witnesses – being a submarine bug. What I mean by that is it can affect branch accounts and it doesn’t appear to be apparent to the subpostmaster/mistress. So “Impact”:

“The branch has appeared to have balanced, whereas in fact they could have a loss or a gain.

“Our accounting systems will be out of sync with what is recorded at the branch.

“If widely known could cause a loss of confidence in the Horizon system by branches …”

So this is not good news. Do you agree?

Duncan Tait: I agree.

Mr Stein: All right. It then goes on to say:

“Potential impact upon ongoing legal cases where branches are disputing the integrity of Horizon data …”

Now, given what we know about this document, which appears to include a possible fix which, unless I’m very wrong, would lead to a conspiracy to false account between two large organisations, what this is saying is this, isn’t it: that, if this gets out, it’s going to muck up legal cases where branches are correctly saying there’s a problem with the system? “We’d better not tell them”, in other words. That’s what’s being considered between two important, well-known brands.

How did that happen, Mr Tait, under your lead?

Duncan Tait: I have no idea, Mr Stein, but this is not how I would expect either organisation to work.

Mr Stein: You’ve been asked question after question by Mr Blake here, who has been saying, “Well, what happened? What happened? Why weren’t matters dealt with by your office? Why didn’t you take notice of what was going on under your leadership?”

Now, there are two answers to this. Either you failed utterly in your leadership or the staff beneath you failed utterly to tell you what was going on. Which answer would you prefer: your failure or your staff’s failure?

Duncan Tait: I don’t think it’s a question of which I would prefer.

Mr Stein: Well, which was it, Mr Tait?

Duncan Tait: I think, from the documents that were given to me, I was reassured about Horizon.

Mr Stein: Reassured by the same people, at least some of the same people, that were involved in relation to the mismatch bug and what was going on?

Duncan Tait: I think Fujitsu Executives and Post Office Executives.

Mr Stein: Thank you, Mr Tait.

The Witness: Thank you.

Sir Wyn Williams: Is that it, Mr Blake?

Mr Blake: Yes. Yes, it is.

Sir Wyn Williams: Then, thank you very much, Mr Tait, for providing your written evidence and for giving oral evidence during the course of the afternoon. I’m grateful to you.

The Witness: Thank you, sir.

Sir Wyn Williams: So tomorrow we have a potentially busy day again, Mr Blake. I think Mr Ward is first up, and he is remote; is that correct?

Mr Blake: That’s correct sir, yes.

Sir Wyn Williams: Oh, it is correct. Right. All right, then. 9.45 in the morning.

Mr Blake: Thank you very much, sir.

(4.35 pm)

(The hearing adjourned until 9.45 am the following day)