Post Office employee changed story for witness statement used to destroy subpostmaster

Post Office inquiry hears how an auditor changed her story about a subpostmaster to help win court battle

Shocking new details have emerged of the legal tactics used by the Post Office to defeat a subpostmaster when he challenged its computer system, with the revelation that there were major omissions and additions in a Post Office auditor’s witness statement which differed from her original report.

Information in a 2004 audit report written by the auditor, which supported the subpostmaster’s case, was omitted from a 2006 witness statement by the same person when the dispute reached the High Court. The 2006 witness statement also included details damaging to the subpostmaster’s case, suggesting he had been drinking alcohol while the audit was being carried out, which was not in the original audit report.

During the latest hearing in the Post Office Horizon IT scandal inquiry, Helen Rose, a former Post Office auditor, was questioned about her involvement in a legal battle with former subpostmaster Lee Castleton, who ran a branch in Bridlington, North Yorkshire. Castleton was made bankrupt after challenging the Post Office in court when it blamed him for unexplained accounting shortfalls.

It emerged there was an audit of Castleton’s branch in 2004 and Rose wrote a report, but when she produced a witness statement in 2006, it only used information that supported the Post Office’s case. The Post Office auditor omitted details that were in the audit report of Castleton’s branch, which supported his claims that shortfalls were caused by computer evidence and retained details that went against him.

In the 2004 audit report, Rose wrote that Castleton was “very pleased” to see the auditors, and he told her he had been in regular contact with his Post Office area manager about his concerns. He believed issues stemmed from computer errors and that none of his staff had committed theft. This detail would have supported Castleton’s case when in court, but Rose omitted it from the witness statement, which was written two years later.

Inquiry KC Jason Beer asked Rose if she had based her witness statement on the audit report she completed two years earlier, and she agreed that she “probably did”.

Beer asked why this information was omitted from her witness statement, to which she replied that she didn’t know and had “no explanation”.

He asked Rose whether the information about Castleton being pleased to see the auditors and that he had been in regular contact with his Post Office area manager would have helped him. After a long silence, she said, “I don’t know. I can’t answer for what I did back in 2004, but I can only presume that the audit would have been part of the evidence so it wasn’t duplicated.”

Beer said: “If that’s the case, there is no point making a witness statement, is there. You could just say ‘please see my audit report, I have nothing more to say.’” Rose responded: “I don’t know.”

Further claims

She also wrote in the witness statement that Castleton had returned to the branch during the audit “smelling strongly of alcohol”, a claim not in the audit report.

Beer asked how this information had “found its way into the witness statement” when it was not in the audit report two years earlier. Rose said she didn’t know, but added: “It must have been a comment I felt necessary to mention, but I can’t remember.”

When his branch showed a loss of £26,000 that he could not explain, the Post Office demanded that Castleton make up the shortfall. Castleton always said the losses in his accounts were caused by computer errors, but he had no way of proving this at the time. 

He was so concerned about the debt that he refused to pay it back, and decided to go to court to contest the Post Office’s insistence that he should pay. The Post Office threw everything at the legal challenge brought by Castleton, and the court ruled that the debt was real, not illusory as Castleton argued. Post Office witnesses in his case said there was no evidence of any problem with the system, and that they were unable to identify any basis upon which the Horizon system could have caused Castleton’s losses.

“The losses must have been caused by his own error or that of his assistants,” the judge said in 2007. “It is inescapable that the Horizon system was working properly in all material respects.”

The judge in Castleton’s case awarded the Post Office damages of approximately £26,000, the amount of the unexplained loss, and costs of £321,000, which bankrupted Castleton.

It has since emerged in the inquiry that the Post Office sought to use the Castleton case to “send a clear message” to other subpostmasters that it would take a firm line on those raising similar allegations.

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