How case of former Cleveleys Post Office operator could have exposed Horizon IT failures two decades ago

A then Post Office manager said he "regrets" not reading an expert's assessment of the kit during a civil action taken against Julie Wolstenholme.

Ex-chief operating officer David Miller told the inquiry his failure to read the 2003 report from IT expert Jason Coyne - along with legal counsel's advice about Ms. Wolstenholme’s case - was a "missed opportunity".

In the years that followed, hundreds of subpostmasters and mistresses were wrongly prosecuted – and many jailed - for theft and false accounting because of Horizon’s deficiencies.

Ms. Wolstenholme was pursued for £25,000 through the civil court by the Post Office. The company later settled the case.

Mr Coyne was instructed to assess whether the subpostmistress was responsible for the losses at her branch, but produced a report which said the Horizon system was "clearly defective".

Mr Miller told the Horizon IT inquiry on Tuesday that Ms Wolstenholme winning her tribunal appeal against the Post Office in 2002 would have been a "significant challenge to the business model".

He said: "What she was doing would be considered by me and others to be a threat to the whole ... if she was wanting to change the subpostmasters' contract and challenged that, that would be a significant challenge to the business model.

Ahead of the civil case in 2004, the inquiry previously heard emails between two Fujitsu employees spoke of how ex-Post Office solicitor Mandy Talbot had advised that "the safest way to manage this is to throw money at it and get a confidentiality agreement signed".

Mr Miller – who also denied “lying” about whether or not he had read Mr. Coyne’s report – said he learned of the document during a meeting with head of security Tony Marsh.

In his witness statement, he said: "He told me there was an issue with the expert advice which had led our counsel to say the case was unlikely to succeed. It was clear that he did not think much of the expert.

"The view was that we should cut our losses and pay up. He said something about Horizon - I cannot recall specifically what he said, but I remember checking with him whether there were issues with Horizon (I said something like: 'You are not saying there are issues with Horizon are you, Tony?')

"He said that there were no issues and I got the impression it was a one-off case.

"Knowing what I now know about Horizon and the way it was used to wrongly prosecute and bring civil claims against subpostmasters, I very much regret not reading the expert's report and counsel's advice.

"Had I done so I would have taken action to address the issues raised. I acknowledge that by not reading them there was a missed opportunity."

Mr Miller said Mr Coyne's report was "not given sufficient weight".

Counsel to the inquiry Emma Price asked: "Do you remember having concerns at the time that there was a computer expert report which was unfavourable and unflattering to Fujitsu?"

Mr Miller said: "There was conflicting information about this report and I have read it thoroughly in the papers that you have given me, and the descriptions from various angles that were given to me of it seem to be unfair."

Ms Price continued: "In what way?"

Mr Miller replied: "That Mr Coyne actually did, within the information available to him, a good job and that didn't suit various parties - including Fujitsu. But certainly, it wasn't given sufficient weight."

The inquiry previously heard that a barrister advising the Post Office was told to take into account that the organisation wanted as "little publicity as possible" drawn to the negative expert report.

The written advice from July 2004 read: "I am asked to take into particular account that the Post Office is anxious for the negative computer experts' report to be given as little publicity as possible."

Mr Miller told the probe the words did not come from him.

Ms Price asked: "Can you help at all with where the message that the Post Office was anxious for the negative computer experts' report to be given as little publicity as possible came from?"

Mr Miller said: "No, I can't - no, sorry, just to say it didn't come from me."

Ms Price continued: "Does this reflect a sensitivity, even at this relatively early stage in 2004, about the integrity of the Horizon system?"

Mr Miller responded: "Particularly any publicity being given to that, yes.."

‘REPUTATIONAL RISK’

A former Post Office chief executive has said he was not "clever" enough to ask what challenges were made to the Horizon IT system during the civil case against Julie Wolstenholme. - despite being aware of the potential loss of £1 million.

Speaking at the Horizon IT inquiry on Tuesday, David Mills said he had seen a Post Office "IT risk register" suggesting that the organisation could suffer £1 million worth of financial and reputational damage if it lost the case against her.

The register, shown to the inquiry, read: "Damage to reputation of Post Office and potential future financial losses if the Post Office loses the court case relating to reliability of Horizon accounting data at Cleveleys Branch Office."

When asked by the counsel to the inquiry, Sam Stevens, what this statement meant to Mr Mills at the time, the former chief executive responded: "Actually, that meant nothing to me at the time.

"What did catch my eye was that the potential financial loss was £1 million."

The company later settled the case for around £180,000.

During Ms Wolstenholme's case, IT expert Jason Coyne was instructed to assess whether the subpostmistress was responsible for the losses at her branch and produced a report in 2003 which said the Horizon system was "clearly defective".

Mr Stevens asked Mr Mills whether he had asked what the challenge regarding the Horizon system was.

Mr Mills responded: "No."

Asked why not, the former chief executive said: "I wasn't that clever. I'm sorry, I didn't ask about it."

Mr Mills said he had not "properly assimilated" that reliability of Horizon was in doubt when the organisation settled Ms Wolstenholme's case.

Mr Stevens continued: "Did it not concern you that an offer of settlement had been made in a case where the reliability of the Horizon IT system was an issue?"

Mr Mills replied: "No because I hadn't properly assimilated the fact that the reliability of Horizon was in doubt - I hadn't got that in my mind.

"What I'd got in my mind was £1 million and looking at this email it looked pretty certain to me that we were going to settle for three months' notice and at the level I was operating at, that seemed the end to that issue."