The feeble genius behind the Ismay report?

Rod Ismay talks of independence and objectivity whilst PO's lawyers drop further into the soup...

Shortly after Gareth Jenkins evidence to the Inquiry was delayed, and with the Post office commissioning an internal review into Bonusgate, it was ironically appropriate that we turned in the Inquiry to an internal review into Horizon conducted by a former accountant who claimed.

“[T]hings like independence and objectivity are core things that are part of the principles of the mindset.”

The words were spoken recently by Rod Ismay, Ernst and Young Alum (audit), and in the hotseat at last week’s PO Inquiry as a former Director of Risk and then Product and Branch Accounting for the Post Office (see here and here for his evidence).

He’s there because he wrote a “System Integrity Report” on Horizon in 2010. It’s a crucial document in the Hamilton case and now the Post Office Inquiry.

It was written in response to increased public criticism of Horizon in the press and by MPs. PO were all over it like a rash at PR, commercial, legal, and stakeholder levels. The latter included liaison with the Government as shareholder. Ismay’s report was central to that response.

I don’t want to dwell on the evidence from Mr Ismay too much (connoisseurs of how bad risk management can be will enjoy it if they go and have a read) but the reader will benefit from knowing that rather than being an objective, even-handed consideration of the allegations faced by Horizon, the report was as follows:

A.     The task I was given was what are the reasons for assurance? I wasn't given the task of what are the allegations and can you investigate them? That was not the remit of this.

Q. You were only asked to present one side of the coin?

A. Yes.

And Mr Ismay does his best to present this as nonetheless objective, “But I think it was an objective assessment of the areas where there were positives.” And, “it's an objective list of things that each team said were the reasons to take assurance.”

A kind description of it would be a rebuttal document, an unkind one, a snow job. It was written, it appears, to educate (or perhaps arm) a new Managing Director in the resilience of Horizon.

The Ismay report is an important document partly for this conclusion:

Our decision between IT, Legal, P&BA, Security and Press Office has continued to be that no matter what opinions we obtain, people will still ask 'what if' and the defence will always ask questions that require answers beyond the report. Further such a report would only have merit as at the date of creation and would have to be updated at the point at which Horizon or the numerous component platforms were upgraded.

Ernst & Young and Deloittes are both aware of the issue from the media and we have discussed the pros and cons of reports with them. Both would propose significant caveats and would have limits on their ability to stand in court, therefore we have not pursued this further."

But its real significance is seen when it makes its point about PO evidential obligations if an independent review did go ahead:

It is also important to be crystal clear about any review if one were commissioned -- any investigation would need to be disclosed in court. Although we would be doing the review to comfort others, any perception that POL doubts its own systems would mean that all criminal prosecutions would have to be stayed. It would also beg a question for the Court of Appeal over past prosecutions and imprisonments.

This quote is something that had, I think, a significant impact on the Court of Appeal’s decision on Hamilton (they were, “troubled by contemporaneous internal documents in which POL expressed concern that disclosure in one case of problems with Horizon could have an impact on other cases.”)

The problem with this plan is pointed out with deft understatement by Jason Beer KC:

Q: Why did you understand that it was permissible to keep your report secret but it wouldn't be for an independent one?

A. I'm not sure I did understand that.

Of course, the Ismay review was not disclosed, so far as I am aware, to any of the civil or criminal defendants until Hamilton itself in 2020/21. A curious failure which I am sure will be probed.

When the Ismay report first became public, I wondered what genius thinks this is an appropriate strategy and thought, watching Ismay give evidence, that we could pretty much guess, but the evidence took a slightly different turn. What we learned for the first time (to my eyes anyway) last week is that the reason the Ismay report did not involve any element of independent review appears to be because a lawyer said stop.

In February 2010, six months prior to the report being produced, a conference call agreed to a series of actions including the preparation of terms of reference for a full investigation into past and present Horizon challenges in civil and criminal cases. To carry out that review and “gain external verification to give a level of “external gravitas” to the response to these challenges.”

That is hardly the most comforting of approaches, but at least they planned to involve some measure of independent involvement at the end. However, Robert Wilson, PO’s Head of Criminal, responded to an email chain setting out this plan in the following terms:

If it is thought there is a difficulty with Horizon then clearly the actions set out in your memo is not only needed but is imperative.

The consequence however will be that to commence or continue to proceed with any criminal proceedings will be inappropriate. My understanding is that the integrity of Horizon data is sound and it is as a result of this that persistent challenges that have been made in court have always failed. These challenges are not new and have been with us since the inception of Horizon, as it has always been the only way that Defendants are left to challenge our evidence when they have stolen money or [when] they need to show that our figures are not correct.

What is being suggested is that an internal investigation is conducted. Such an investigation will be disclosable as undermining evidence on the defence in the cases proceeding through the criminal courts. Inevitably the defence will argue that if we are carrying out an investigation we clearly do not have confidence in Horizon and therefore to continue to prosecute will be an abuse of the criminal process. Alternatively, we could be asked to stay the proceedings pending the outcome of the investigation. If this were to be adopted, the resultant adverse publicity could lead to massive difficulties for POL, as it would be seen by the press and media to vindicate the current challenges. The potential impact is however much wider for POL, in that every office in the country will be seen to be an operating a compromised system with untold damage to the business. Our only real alternative to avoid adverse publicity will be to offer no evidence on each of our criminal cases. This should mitigate some adverse publicity but it is not a total guarantee.

To continue prosecuting alleged offenders knowing that there is an ongoing investigation to determine the veracity of Horizon could also be detrimental to the reputation of my team. If we were to secure convictions in the knowledge that there was an investigation, where the investigation established a difficulty with the system, we would be open to criticism and appeal to the Court of Appeal. The Court of Appeal will inevitably be highly critical of any prosecutor's decision to proceed against the Defendant's in the knowledge that there could be an issue with the evidence. "What we really need to do is impress upon Fujitsu the importance of fully cooperating in the provision of technical expertise and witness statements to support the criminal and civil litigation now and in the future.

Given the nature of the discussions that took place on 26 February, I am staggered I was not invited to take part in the conference.

He is going to regret being so cross.

An email chain a few days later indicated the outcome:

As was discussed on the conference call and taking into account Rob's comments, to confirm that what we are looking at is a 'general' due diligence exercise on the integrity of Horizon, to confirm our belief in the robustness of the system and thus rebut any challenges.

So it appears the modestly independent sting in the proposed Ismay review was removed at the request of Mr Wilson, the head of criminal overseeing prosecutions in Horizon. This was a few months before the prosecution of Seema Misra. And no disclosures of that process were made to defence lawyers for the next 10 years or so. Seema of course went to jail.

There are other details about this particular element of the saga which I will leave for another day, when the Inquiry (inevitably I think) develops them rather than have me speculate now.

Jarnail Singh (another solicitor in the criminal team) features heavily (and has garnered justifiably critical press for crowing over the prosecution of Seema Misra. In destroying her defence (Ismay it becomes clear is involved in the non-disclosure at the heart of that too).

Similarly, Mandy Talbot (who it seems had (has?) a long career in PO Compliance post-Misra) then as “Principal Lawyer” makes a number of appearances particularly around Lee Castleton’s case, being keen to get publicity off the back of their victory against him as a litigant in person (as is Stephen Dilley partner at Womble Bond Dickinson), and taking some quite aggressive looking steps to defend Horizon in Castleton’s case and more generally.

On the back of things like this, Counsel to the Inquiry appears to be building a case of “weaponization” of legal proceedings against the likes of Castleton and Misra.

But for now, let’s leave the final words for Mr Ismay (who may yet return to give more evidence).

But it mystifies me sometimes, looking back at it, just to think that why was it that me, managing a back office finance team, was the person asked to collate some of these things, and to be answering questions about a system.

I am going to go out on a limb here, but bear with me; objectivity and independence were not the reasons.