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 a civil case against a subpostmistress – 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 a civil case against subpostmistress Julie Wolstenholme.
Ms Wolstenholme ran a branch in Cleveleys, Lancashire, and was pursued for £25,000 through the civil court by the Post Office.
The register, shown to the inquiry on Tuesday, 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.”