The recently-departed chair of the Post Office has said there remained ‘lingering distrust’ of postmasters within the company even this year. Such sceptics, Henry Staunton told the Post Office Inquiry today, included lawyers still working for the organisation who were still commissioning investigations based on questionable data as recently as last year.
Staunton was tasked with oversight and governance at the Post Office and took office in December 2022 as the various compensation schemes were being put together and implemented.
He explained in his inquiry witness statement that he had assumed the case for earmarking substantial funds for compensating victims would be ‘overwhelming’, but he was told there was ‘little appetite’ in government for decisive action.
He held reservations from the outset that the scale of the scandal was not fully appreciated, and it became clear early on that exoneration of the 700-plus postmasters convicted on evidence from the Horizon IT system was ‘not on the agenda’. Indeed, Staunton said the ‘widespread view internally’ at the Post Office was that those who had not come forward to appeal were guilty, and that most of the convictions should still stand.
A triage process from January 2023 identified only 12% of the 552 cases reviewed as being likely to lead to the Post Office conceding. At the board meeting last November, the remediation committee reported that in 333 cases the conviction did not appear unsafe.
On compensation, Staunton believed there seemed ‘little recognition within the Post Office’s remediation team that this was an injustice on an ‘industrial scale’. He added that in-house and external lawyers for the organisation ‘made issues overly adversarial’.
Staunton recounted an internal report from January 2023 which gave an account of a former postmaster who was one of the first to formally reach settlement after their convictions were overturned. This woman had described feeling humiliated and said the remediation process was impersonal, adding that the Post Office’s lawyers had ‘demonstrated brutality and lack of trust in the process of recovering compensation’.
Ben Foat, head of legal, had advised the chair that postmasters were not employees of the Post Office, so the same duty of care did not apply to them.
Staunton told the inquiry: ‘I recall saying to Mr Foat after the meeting that, after all that happened to wronged postmasters, regardless of the technical legal position, I thought for moral (and many other) reasons we should proceed on the basis that we owed postmasters the same duty of care if not more.’
Staunton also revealed that, in January 2023, Foat commissioned the Post Office’s investigation team to investigate a postmaster who ran branches in London and Hertfordshire and was a non-executive member of the board. This followed an apparent shortfall on the Horizon system which had appeared (and which later was found to be a fraction of the amount which had been identified). Staunton said the situation was ‘utterly unconscionable’ and showed the Post Office ‘still had some way to go in correcting the poor culture of resorting to heavy-handed investigations as the kneejerk reaction to any issue’.
Foat, who will appear before the inquiry later this month, reportedly planned to send auditors to pay an unannounced visit to the affected branches.
Staunton added: ‘Given the history of unduly harsh investigations into postmaster shortfalls, the handling of this matter showed a real lack of judgment. It also revealed a surviving inclination in the legal team to “over-investigate” every matter rather than deal with matters openly and transparently via dialogue with postmasters.’
The inquiry heard that Staunton wrote about Foat in an email to the chief executive in December 2023 that ‘I have never had a legal counsel in whose judgement I have so little faith’.
Even after the ITV drama in January which highlighted the Post Office scandal, Foat had written to senior people to say the media was reporting ‘erroneous’ facts and that the Post Office should prepare a ‘fact checker’ to explain that not all convictions were unsafe. Staunton said this was a ‘rigidly legalistic view that struck completely the wrong tone’.
Staunton referenced a letter from February this year from Nick Vamos, of external adviser Peters & Peters, to Post Office Limited. This letter, which came up in the inquiry earlier this year, had advised that ‘it is highly likely that the vast majority (… of postmasters) who have not yet appealed were in fact guilty as charged’.
Staunton, who left the organisation soon after, wrote to the chief executive to say that Post Office lawyers were ‘continuing to defend the indefensible’.
The inquiry continues.