|Dr Minh Alexander|
As Dr Alexander found out more about the way the Post Office had treated its Subpostmasters, she became increasingly concerned about Fit and Proper Person issues.
As Dr Alexander puts it:
"NHS trusts are under a legal obligation to recruit and to do ongoing checks to ensure that their directors are Fit and Proper Persons. In a safety critical sector, it is vital that directors can be trusted to act accountably, to fulfil an organisational legal Duty of Candour and to prioritise patients’ wellbeing and safety above any considerations of reputation management.
The Post Office’s behaviour under Paula Vennells’ leadership was not accountable nor open about its computer problems, and the Post Office instead caused serious suffering to scapegoated subpostmasters, some of whom had been prosecuted and jailed.
It would be very unsafe for such a corporate culture to be replicated in the NHS, where vulnerable patients would take the brunt of any cover ups. I have therefore asked the relevant health regulator, the Care Quality Commission (CQC) to exercise its powers under CQC Regulation 5 Fit and Proper Persons (FPPR), and to review Imperial College Healthcare NHS Trust’s Fit and Proper Person arrangements."
Nigel AchesonDeputy Chief Inspector of HospitalsCare Quality Commission24 December 2019
Dear Mr Acheson,
FPPR referral on Paula Vennells, former CEO of Post Office Ltd and current Chair of Imperial College Healthcare NHS Trust
I would be grateful if the CQC could look into whether Paula Vennells is a fit and proper person to be a director on an NHS trust board, under CQC Regulation 5 Fit and Proper Persons (FPPR).
This is in relation to the widely publicised failings by the Post Office Ltd, where she was a senior manager from 2007 and the CEO between 2012 and 2019, before taking up her current post as Chair of Imperial College Healthcare NHS Trust.
Paula Vennells presided as CEO over a period in which Post Office Ltd:
- Resisted criticisms of its Horizon computer system, which has since been demonstrated to cause errors in accounting;- Repeatedly publicly denied faults in its computer system, when it was actually aware of such faults;- Resisted concerns that it had treated subpostmasters unfairly and had wrongfully prosecuted some of these individuals over accounting anomalies that were caused by its own computer faults;- Continued to pursue and prosecute more subpostmasters over anomalous accounts that were likely related to the computer problems;- Aggressively resisted legal claims by subpostmasters in relation to their mistreatment by the Post Office;
A High Court judgment by Judge Fraser of 16 December 2019, in a group action by subpostmasters against Post Office Ltd, concluded:
“968 It was possible for bugs, errors or defects of the nature alleged by the claimants to have the potential both (a) to cause apparent or alleged discrepancies or shortfalls relating to Subpostmasters’ branch accounts or transactions, and also (b) to undermine the reliability of Horizon accurately to process and to record transactions as alleged by the claimants.”“969 Further, all the evidence in the Horizon Issues trial shows not only was there the potential for this to occur, but it actually has happened, and on numerous occasions. This applies both to Legacy Horizon and also Horizon Online. It has happened under both the HNG-X and HNG-A iterations of the Online system, but far less frequently under the latter than the former. Indeed, there are only isolated instances of it happening in respect of HNG-A, which the experts agree is a better system than either of the other two iterations of Horizon.”“970 I accept the claimants’ submissions that, in terms of likelihood, there was a significant and material risk on occasion of branch accounts being affected in the way alleged by the claimants by bugs, errors and defects.”Judge Fraser also found that both Fujitsu, the company responsible for the Horizons computer system, and to a lesser extent Post Office Ltd, had remote access to branch records and could “insert, inject, edit or delete transaction data or data in branch accounts”.
On 11 December 2019 the Post Office Ltd and subpostmaster claimants in the group legal action against Post Office Ltd issued a joint statement, after coming to a settlement.In this joint statement, Post Office Ltd accepted that it had got things wrong:
“We accept that, in the past, we got things wrong in our dealings with a number of postmasters and we look forward to moving ahead now, with our new CEO currently leading a major overhaul of our engagement and relationship with postmasters”Lord Arbuthnot who has supported the subpostmasters, has called for a public inquiry into the very serious failings by Post Office Ltd, and noted that the subpostmasters had been fully vindicated:“The subpostmasters have been vindicated in every respect. It is an excellent Christmas present, but won at great cost. The cost falls partly on the taxpayer but also heavily on the subpostmasters themselves, who will have their damages reduced by the amount the litigation funders will (justifiably) deduct.”
Post Office Ltd has been very heavily criticised for its prolonged attempts over several years to cover up its failings and its abuse of power, to the extent of scapegoating and punishing subpostmasters when it knew that there were faults in its computer system.
Judge Fraser the High Court judge who oversaw the most recent litigation against Post Office Ltd has criticised Post Office Ltd’s behaviour and extreme denial in the most serious terms:
“928 The approach by the Post Office to the evidence of someone such as Mr Latif demonstrates a simple institutional obstinacy or refusal to consider any possible alternatives to their view of Horizon, which was maintained regardless of the weight of factual evidence to the contrary. That approach by the Post Office was continued, even though now there is also considerable expert evidence to the contrary as well (and much of it agreed expert evidence on the existence of numerous bugs).“929 This approach by the Post Office has amounted, in reality, to bare assertions and denials that ignore what has actually occurred, at least so far as the witnesses called before me in the Horizon Issues trial are concerned. It amounts to the 21st century equivalent of maintaining that the earth is flat.“930 When real world examples such as Mr Latif’s are put together with the expert evidence that I have accepted – or even with Dr Worden’s lower figure for accepted bugs of 11 different ones – it can be seen that this institutional obstinacy by the Post Office amounts to little more than repeated assertions that the Horizon system (both Legacy and Online) cannot be to blame for the claimants’ experiences, coupled with (for some) challenges to the claimants’ witnesses because the Post Office simply cannot accept their factual accounts.”The extreme organisational denial was juxtaposed with abundant evidence of incidents caused by bugs in the Horizon computer system. Judge Fraser noted that one of the known software bugs in the Horizon computer system, the so-called “Dalmellington Bug” was known to have caused numerous incidents dating back to 2010:
Judge Fraser noted an important comment by a Fujitsu employee which threw light on the fact that Horizon software bugs had been recognised for many years:
“925 One notable example is the expression used by Anne Chambers – “this bug has been around for years” – in February 2006.”
Judge Fraser noted that contemporaneous documents recorded that Post Office Ltd staff had seen the computer faults and had ruled out user error:
“940. I have already explained that the subject matter of the Simetra case is very different to this one, and I emphasise here that my analysis of the contemporaneous documents is in respect of the Horizon Issues in the context of this case, not the Simetra case which concerned very different allegations. Here, the categories of documents that are most illuminating in terms of specific incidents with Horizon over the years are the very numerous PEAKs and KELs. These emanate from, and are created within, Fujitsu. They are, in my judgment, a very good means of getting at the truth in this case. They show what was going on and the type of unexplained problems that numerous SPMs were experiencing in practice over the years, as they were reported to the SSC. They contain statements made when Fujitsu personnel’s “guard is down and their true thoughts are plain to see”. Some of them also record that Romec engineers, or the Post Office’s own auditors, have seen what has occurred and ruled out user error. Notwithstanding this, Fujitsu attribute user error to what has occurred.”
The judge noted that internal 2009 Post Office Ltd documents showed that the company was aware of faults in its Horizon computer system:
“942….”However, we need to continue to manage firmly any over-expectations of the frontline that Horizon Online will deliver improved functionality – they may see this as a missed opportunity so will not cure all the issues and problems that users have with Horizon although where practical, and at no extra cost, we have smoothed away a number of “rough edges”.
Judge Fraser found that a 2011 Post Office Ltd document about correcting a system fault in the handling of Camelot lottery transactions showed that user error by subpostmasters was not at issue:
“945. This has nothing to do with correcting excessive carelessness or fault on the part of SPMs. It is, in my judgment, about remedying a deficiency in the functionality of Horizon. That document also made it clear, because there are express entries to this effect, that outages might mean that the system would not deal with the matters sufficiently or accurately.”
The judge found that Post Office Ltd was negligent in its response to accounting anomalies and to the concerns raised by subpostmasters:“217. In my judgment, the stance taken by the Post Office at the time in 2013 demonstrates the most dreadful complacency, and total lack of interest in investigating these serious issues, bordering on fearfulness of what might be found if they were properly investigated. This SPM, whose branch was known to the Post Office, should obviously have been asked for further details (if further details were required for an investigation), and the Post Office and/or Fujitsu should plainly have investigated the matter as a matter of some importance. By 2013 Horizon was an extraordinarily controversial subject; there can simply be no sensible excuse for the Post Office’s failure to try and understand this particular subject. This is particularly reprehensible given that an internal Post Office document in August 2013 showed that Mr Winn’s involvement in this was because his area of responsibility was as follows: “also responsible for resolving specific branch accounting issues.” It was his specific job to resolve specific branch accounting issues, yet he decided at the time that “we have enough on”.
Judge Fraser noted that instead of handling the concerns about the Horizon computer system properly, Post Office Ltd blamed subpostmasters for carelessness or dishonesty:
“517. The Post Office has, however, maintained publicly that it was seeking to be “transparent” about Horizon, and prior to the litigation it made certain public statements in relation to the increasing disquiet on the part both of SPMs, and others who became involved either on their behalf (such as some Members of Parliament) or in an investigative way (such as the BBC Panorama programme and other journalists). These statements by the Post Office routinely and strongly insisted that there was nothing in the criticisms being levelled at the accuracy of Horizon, and that losses that were shown in SPMs’ branch accounts were caused either by carelessness or dishonesty on the part of the different SPMs who experienced what they considered to be unexplained discrepancies and losses.”
Judge Fraser noted a point blank denial made by Post Office Ltd in 2015:
““The Post Office wholly rejects extremely serious allegations repeated in BBC’s Panorama programme of 17 August 2015. The allegations are based on partial, selective and misleading information.· The Post Office does not prosecute people for making innocent mistakes and never has· There is no evidence that faults with the computer system caused money to go missing at these Post Office branches· There is evidence that user actions, including dishonest conduct, were responsible for missing money”
Judge Fraser noted that a 2016 letter by Post Office Ltd lawyers made the following claims, casting blame on subpostmasters:
“954…The Post Office’s solicitors’ response to the pre-action letter is dated 28 July 2016, very lengthy, and states that “the investigations to date have consistently pointed towards human error or dishonest conduct in branches as the most likely cause of shortfalls.”The judge criticised Post Office Ltd’s decision in 2016 not to investigate one of the software bugs, and noted that internal documents showed that Paula Vennells was aware of the issue and had originally asked her staff to look into the matter:
“This needs looking into please.”
Judge Fraser criticised witnesses called by the Post Office Ltd for giving factually incorrect or misleading evidence, and he criticised submissions by Post Office Ltd. For example:
“249. Mrs Van Den Bogerd was in the witness box for in excess of one day, the longest period of any of the witnesses of fact for either the claimants or the Post Office. Her cross examination led to a far greater understanding of the Horizon Issues on the part of the court, although her written evidence was, as originally drafted, extraordinarily one- sided. She minimised any reference to problems or issues with Horizon, and reverted to potential user error whenever possible as a potential explanation, an approach which she explained in her written statement as providing “plausible” explanations. Her witness statement also stated, in terms, the exact opposite of what the reality of the situation was, and I have given examples at ,  and  above. Witness statements are supposed to be factually accurate, and care must be taken in future rounds of this group litigation that they are drafted in accordance with the rules. Making statements that are the exact opposite of the facts is never helpful, to put it at its mildest. It is also the opposite of what witness statements are supposed to be.”
“442. Mr Godeseth gave express evidence in his witness statement that the Receipts and Payments mismatch bug occurred in September 2010. That date too was factually incorrect. The issue notes refer to Fujitsu knowing about it far earlier, and Mr Godeseth accepted he had seen this document before his cross-examination. That document even records Fujitsu being taken to task by the Post Office about how long it had taken to react, as in “We have asked Fujitsu why it has taken so long to react to and escalate an issue which began in May. They will provide feedback in due course.” Not just the impression, but the express text in Mr Godeseth’s witness statement, was to the effect that the bug was discovered in September 2010 and almost immediately dealt with. That was far from the case, and that written evidence was simply wrong.”
“422. Mr Godeseth’s witness statement about this, prior to his cross-examination, presented a very different picture to the one that eventually emerged. Indeed, I would go further, and I find that his witness statements omitted some very important headline points in respect of the Callendar Square bug, presented a chronology very different to the real one, and had the effect (whether intended or accidental) of giving a misleading impression of the Callendar Square bug and its impact.”
“294.…Mr Dunks expressly sought to mislead me by stating that there was no “Fujitsu party line” when it came to the contents of drafting witness statements about audit records for legal proceedings. There plainly is; it was used in the Fujitsu statements in 2010 and it was used by him in his statement for the Horizon Issues trial.
“565.1 A witness statement was ordered from the Post Office to explain the express, and factually incorrect, submissions made to the court by the Post Office about the Royal Mail’s refusal to produce, at the Post Office’s request, audit documents. The Royal Mail had, contrary to what the court had expressly been told by the Post Office, not even been asked by the Post Office for these. The Post Office’s leading counsel accepted that he had, entirely unwittingly, and on instruction, provided misleading information to the court and explained and apologised as soon as he discovered this.
“938. The Post Office’s approach to evidence, even despite their considerable resources which are being liberally deployed at considerable cost, amounts to attack and disparagement of the claimants individually and collectively, together with the wholly unsatisfactory evidence of Fujitsu personnel such as Mr Parker.”
Judge Fraser said he had “grave concerns” about evidence given by Fujitsu employees to other courts:
““Based on the knowledge that I have gained, I have very grave concerns regarding veracity of evidence given by Fujitsu employees to other courts in previous proceedings about the known existence of bugs, errors and defects in the Horizon system.”
Judge Fraser criticised failure of disclosure by Post Office Ltd:
“457. …To see a concern expressed that if a software bug in Horizon were to become widely known about it might have a potential impact upon “ongoing legal cases” where the integrity of Horizon Data was a central issue, is a very concerning entry to read in a contemporaneous document. Whether these were legal cases concerning civil claims, or criminal cases, there are obligations upon parties in terms of disclosure. So far as criminal cases are concerned, these concern the liberty of the person, and disclosure duties are rightly high. I do not understand the motivation in keeping this type of matter, recorded in these documents, hidden from view; regardless of the motivation, doing so was wholly wrong. There can be no proper explanation for keeping the existence of a software bug in Horizon secret in these circumstances.”Judge Fraser criticised Post Office Ltd’s “extreme” preoccupation with protecting reputation and its avoidance of scrutiny:
“946. A theme contained within some of the internal documents is an extreme sensitivity (seeming to verge, on occasion, to institutional paranoia) concerning any information that may throw doubt on the reputation of Horizon, or expose it to further scrutiny. One entry in a document that makes it clear that the Post Office itself had already recognised this is contained in a document authored by Mrs Van Den Bogerd, entitled “Extracts from Lessons Learned Log” and dated 11 November 2015. One entry under “issues identified” was as follows in respect of the Post Office’s behaviour up to that date:"Failure to be open and honest when issues arise eg roll out of Horizon, HNGx migration issues/issues affecting few branches not seemingly publicised." (emphasis added)”
Judge Fraser noted that Paula Vennells asked her staff about remote access to the Horizons computer system, (and whether parties other than subpostmasters could be responsible for amending records), and that at the same time she told her staff what she wished to say to the BIS select committee:
“545….The statement in the Defence was misleading too. It ought also to be noted that the truth did not emerge internally within the Post Office in the email answers provided to internal inquiries in 2015 by senior Post Office personnel, such as the Chief Executive, who posed the specific question in preparation for providing evidence to a Select Committee and asked: “What is the true answer?”
“546. She also said in the same email “I hope it is that we know this is not possible and that we are able to explain why that is”. The true answer is that, contrary to her aspiration, it was possible.”
“547. She also stated “I need to say no it is not possible and that we are sure of this because of xxx and that we know this because we have had the system assured.” The true answer to that was also “yes, it is possible”.
Judge Fraser has passed a file to prosecutors:
You will note that the above article on the criminal probe observes that the judge made a finding that Post Office Ltd misled Lord Arbuthnot in 2015, when Paula Vennells was CEO.
Lord Justice Coulson of the Court of Appeal who rejected an appeal by Post Office Ltd has equated Post Office Ltd’s misconduct as an employer with the behaviour of “Victorian factory owner”
“The Post Office is accused of blaming sub postmasters and mistresses (SPMs) for alleged shortfalls in branch accounts since the roll out of a computer system called Horizon. Earlier this month it sought to appeal the judgement of the first trial, known as the ‘common issues trial’.However, Lord Justice Coulson dismissed the Post Office’s appeal on all 26 grounds, citing ‘a number of reasons which militate against granting the PO permission to appeal’ and comparing the business to a 'a mid-Victorian factory-owner'.”
In his judgment, Lord Justice Coulson noted that Post Office Ltd’s application to appeal misrepresented findings by the original judge and it had made claims which were “demonstrably wrong”:
“Many of the PO’s difficulties now are self-inflicted. For example, as happened during the trial and on the application for permission to appeal both to the judge, and to this court, the PO has consistently put its arguments much too high. It made sweeping statements about the trial and the judgment which were demonstrably wrong. The PO ascribed various findings or conclusions to the judge which, on analysis, form no part of his judgment.”
He also dismissed aspects of Post Office Ltd’s application to appeal as:
“fanciful and wholly unpersuasive.”He also criticised Post Office Ltd’s aggressive litigation style:
“7. Another aspect of the PO’s litigation strategy which works against them now is their desire to take every point, regardless of quality or consequences. That was regularly apparent during the trial, where the judge correctly labelled their approach as “attritional”. The same approach was still in evidence on the application for permission to appeal.”Lord Justice Coulson singled out this example of unreasonable, unaccountable behaviour by Post Office Ltd:“8.….The PO accepted at trial that the written contracts (the SPMC and the NTC) were inadequate as they stood and that some terms had to be implied. But the PO’s proposed terms were pitched at such a high and general level that they were of no practical value. By contrast, the SPMs put forward 20 odd detailed terms for the judge’s consideration. The judge asked the PO to be more helpful: the PO’s pleaded response was a one-line assertion that the terms put forward by the SPMs were denied. Having refused to put forward the detail of their case on the implied terms at the appropriate time, the PO cannot seriously complain now because they do not like the detail of the implied terms found by the judge.”The massive cost of legal proceedings, which have been inflated by Post Office Ltd’s aggressive tactics over years and which will reduce the real level of compensation available to the harmed subpostmasters, have been much criticised.
Lord Arbuthnot has called for a clear out of Post Office Ltd’s board in the light of all the extremely serious failures of governance and probity:
Lord Arbuthnot advised that the consultancy Second Sight will hold detailed evidence of executive culpability:
“My own suggestion is that the government should clear out the entirety of the board and senior management of the Post Office and start again, perhaps with the assistance of consultancy services from Second Sight, who know where the bodies are buried,” he said.”The final report compiled by Second Sight reported that certain themes emerged from subpostmaster’s complaints about mistreatment by Post Office Ltd:
Second Sight reported on many examples of unfairness in Post Office Ltd’s treatment of subpostmasters. For example:
Second Sight noted a denial by Post Office Ltd that it could remotely access and manipulate branch records, which the High Court has since found to be untrue:
Second Sight reported a lack of cooperation by Post Office Ltd in looking at cases of possible miscarriage of justice:
Some accused subpostmasters reported harassment by Post Office Ltd staff and intrusive searches of their homes. For example, Tracey Merritt reported that her home was searched and that she was asked to sign a “confession” composed for her by Post Office Ltd staff:
““These people have been under extraordinary pressure for decades,” he said. “The Post Office clearly knew there were things wrong with the [IT] system.”He said the settlement was “not enough” to make up for the suffering they had endured. An inquiry, he added, would root out who was accountable. “It starts with Paula Vennells, but it includes the whole board of the Post Office.””
The Daily Mail has also reported on her failure to apologise:
Her role in these matters have been documented by Nick Wallis, a journalist who has followed the Post Office trial in great detail: The ballad of Paula Vennells
In 2015 Paula Vennells appeared before the parliamentary Business, Innovation and Skills Committee and gave evidence about the Horizon computer system scandal:
Mr Wallis writes thus of the 2015 proceedings:
“During that inquiry, Ms Vennells refused to accept the Post Office had done anything wrong with regards to prosecuting its Subpostmasters, and during that session she failed to answer a question about how much legal coaching she'd received in advance of answering MPs questions.”
Hundreds of subpostmasters and their families have been harmed by Post Office Ltd’s cover up and scapegoating. Some of the harmed individuals have been financially ruined, suffered grave damage to their reputations and livelihoods, serious damage to their health and some have been wrongfully prosecuted, convicted and jailed. A pregnant subpostmaster, Seema Misra, was jailed:
Some have died.
These are some powerful individual accounts of their suffering that have been collated by Nick Wallis:
You will see from the testimony of victims and their families that some of the affected individuals have died, some through suicide:
The Criminal Cases Review Commision confirmed that it was looking into 35 cases of reported miscarriages of justice from the Horizons computer affair, involving 22 prison sentences:
The Post Office Horizons computer scandal has been catastrophic not only for these individuals, but for confidence in an important organisation and the stability of Post Office Ltd. It has cost the public purse millions that could have been avoided if the Post Office Ltd had acted more accountably and responsibly.
It is vital that NHS staff should not be exposed to the sort of risks and harm that befell subpostmasters, and that any organisational wrongdoing and any patient harm and deaths caused by Imperial Healthcare NHS Trust should not be approached in the way that Post Office Ltd approached the flaws in the Horizon computer system.
I copy this to Lord Arbuthnot for his information, and I copy it to Dido Harding the chair of NHS Improvement, which is the body which is responsible for appointing the directors of non-Foundation NHS trusts such as Imperial College Healthcare NHS Trust. I also copy it to Tom Kark QC in respect of his review of the application of FPPT in the NHS.
Lastly, I note that on 23 July 2019, after Paula Vennells had joined the trust, that the Care Quality Commission rated the trust as “Good” in the Well-Led domain.
The CQC inspection team was as follows:
“The inspection team consisted of one CQC hospital inspector, an observer (CQC staff) and two specialist advisors (matron and head of midwifery). The inspection was overseen by Terri Salt interim head of hospital inspections."
I found no comment in CQC’s inspection report on whether the trust was meeting its duty under FPPR to ensure that its directors were Fit and Proper individuals.
"The leadership, governance and culture of the trust promoted the delivery of high-quality person-centred care.
Managers at all levels in the trust had the right skills and abilities to run a service providing high-quality sustainable care. There have been several changes in senior leadership since the last inspection. Following his appointment as CEO at NHS Improvement, Ian Dalton was replaced by Professor Julian Redhead, acting as the interim chief executive officer, from 4 December 2017. Professor Tim Orchard was appointed as chief executive officer from 7 June 2018. Professor Orchard was formerly the trust’s interim medical director and divisional director of medicine and integrated care. The trust also had a new Chair of the board, Paula Vennells CBE joined the trust on 1 April from the Post Office, where she is group chief executive. Despite these changes, we found a stable senior leadership team in place with the appropriate range of skills, knowledge and experience. The trust leadership team had a comprehensive knowledge of current priorities and challenges and was taking action to address them."