A lawyer acting for the Post Office advised the organisation in an email not to leave a ‘paper trail’ as reports started coming in that the Horizon system was faulty.

The Post Office Inquiry yesterday saw correspondence between Andrew Parsons, a partner at Womble Bond Dickinson, Post Office general counsel Susan Crichton and head of corporate finance Charles Colquhoun in 2013.

Responding to a draft letter for the Post Office’s insurance broker about the IT system, Parsons said the letter ‘does nothing more than put POL’s insurers on notice of the Horizon issues’.

His response continued: ‘My own hesitation is whether this is strictly necessary to do. From a PR perspective it would look bad if this got into the public domain – sign of guilt/concern from the board.’

Parsons suggested the Post Office ‘hold fire’ on notifying insurers there may be issues with Horizon and recommended ‘tweaking’ the letter to say that the press had reported on potential issues with Horizon, rather than that financial discrepancies had occurred with the system.

Parsons later emailed saying that the risk of notification was that it would ‘look bad for POL if it ever became public knowledge that POL notified its insurers’. He recommended that the Post Office speak to its insurers rather than send a formal written notice ‘so as not to leave a paper trail’.

The exchange was shown to former sub-postmaster Alan Bates, who led the campaign to expose the Horizon scandal, during his evidence session on Tuesday. Inquiry counsel Jason Beer KC asked whether there was anything to demonstrate the Post Office was seeking to establish ‘plausible deniability’ over the issue. Bates said: ‘No paper trail.’

The inquiry was also shown correspondence from 2017 between Post Office leaders and Parsons in response to a statement issued by Justice for Sub-Postmasters Alliance (JFSA), the group founded by Bates.

JFSA had claimed that more than 1,000 sub-postmasters had applied to join a group litigation action against the Post Office. Parsons said in his reply: ‘Plus let’s not forget that Alan Bates has a somewhat loose relationship with the truth.’

Bates told the inquiry the group’s statement had been accurate and that he did not know how Parsons had formed this opinion of him. Bates added: ‘Andrew Parsons is one of those that used to appear at the working group meetings, one of the many lawyers that Post Office used to send to them and, I mean, I don’t know why he’s come up with that.’

Parsons is due to give evidence to the inquiry next month.