We're hearing inquiry counsel Jason Beer KC summing up six key problems with the ARQ (audit) data.

He puts to Patterson that the problems present a "rather sorry tale" of the reliability of ARQ data.

Patterson agrees, and acknowledges there were "many bugs and errors" in the first two incarnations of the Horizon software.

He is then asked if he agrees that ARQ data outght not to have been relied upon as an accurate and complete record of the transactions conducted by sub-postmasters and mistresses at their branches.

Patterson agrees.

Image source, Post Office inquiry

Discussion in the inquiry room remains on the theme of ARQ (audit) data, and the way this was provided to the Post Office.

We're continuing to bring you the standout moments on this page.

Sam Hancock
Reporting from the inquiry

Here's a bit more from my conversation with former sub-postmaster Lee Castleton, who I spoke to during a brief mid-morning break.

He tells me the "rounded experience of watching the inquiry" is something he finds "very interesting" - and jokes that others may not feel the same.

Being here is "therapeutic in a way," he says.

We talk about his family, who Castleton has previously told the BBC were badly affected by all this. His daughter, for instance, was once spat at because local people presumed Castleton was a thief.

"All this is part of the journey," he tells me when I ask how they're doing. "We want to do this, we want to be part of this ... we just look forward to the end of it."

I push for a bit more on what the end of this saga looks like for him. Castleton says:

Sam Hancock
Reporting from the inquiry

Image source, PA Media

I caught up with Lee Castleton during the inquiry's brief morning recess.

A former stockbroker, he bought a seafront Post Office branch in 2003, and began to notice thousands of pounds in losses from his accounts within months of taking over the business.

Castleton, from Bridlington, East Yorkshire, was accused of having a £25,000 shortfall at his branch. He was left bankrupt after the Post Office spent two years and £320,000 pursuing him for the missing money through the civil courts.

He tells me it's important to be here today so he can hear Fujitsu's side "from the man at the top".

I ask if he's shocked, or surprised, by anything he's heard the company's Europe boss Paul Patterson say, to which he says no. Why? "Because there had to be failings somewhere, problems that weren't laid out [by Fujitsu] correctly ... but hopefully through his evidence today, we'll see what those consist of."

Castleton adds that it's "not for me to judge - it's for the professionals", and that he's particularly interested to see what the inquiry's chair Sir Wyn Williams thinks of Patterson's evidence.

• Read more about Lee Castleton's case here

Fujitsu boss Paul Patterson has said some witness statements used in the prosecutions of subpostmasters were "misleading", as they did not mention that the company provided incomplete audit data (ARQ data) to the Post Office.

Patterson says witness statements "should have been far more comprehensive before being placed in front of a sub-postmaster" and the courts.

Beer also challenges him on Fujitsu filtering out ARQ data before evidence was passed to the Post Office. This step was also not mentioned to the Post Office

This means the data was "false and misleading by omission", Beer suggests. Patterson agrees.

Patterson also adds that the data is not the "gold standard", describing it as a simple excel file that tells "doesn't tell you very much".

Earlier in this morning's inquiry hearing, Paul Patterson, CEO of Fujitsu’s European arm, talked about evidence of bugs in the Horizon software being edited out of witness statements.

He conceded it was "shameful and appalling".

Paul Patterson - the head of Fujitsu's European wing - is back in his seat to continue his evidence.

You can watch live by pressing the Play button at the top of this page.

This brief interval gives us a chance to reflect the story of another person who fell victim to the scandal.

Sub-postmistress Tracey Merritt, from Somerset, said she did not speak to her daughter for 18 months after being threatened by Post Office investigators.

Working alongside her daughter, Lisa Porter, they ran two offices in Dorset. In 2009 Tracey was dismissed for "inappropriate use of funds" and prosecuted for theft.

When Post Office investigators started questioning her, Tracey says she was threatened: "I was told I needed to confess otherwise I would go to prison... I was then told I couldn't talk to my daughter, and I believed them."

Eventually, the charges against her were dropped.

While successfully suing the Post Office in 2019 may seem like a small victory, Tracey was told she was ineligible to claim damages as the charges against her were dropped, whilst most of the compensation she received has paid for legal fees.

The Post Office said: "We are doing all we can the put right the wrongs of the past."

• You can read the full story here

The inquiry has just taken a 15-minute break. Shortly before the pause began, conversation turned to Fujitsu's "known error log" for its Horizon software.

Patterson acknowledged there was evidence that the existence of such a record was not shared with the Post Office.

He says it's "not unusual" for a system of this size to have known errors. But, pressed on why the log was not shared while prosecutions of Post Office workers was happening, he says he had "no idea".

Image source, Post Office inquiry

There's is a lot of fiddly terminology to get our heads round at today's hearing - the bulk of which inquiry counsel Jason Beer KC is running through at the moment.

Beer is also setting out some procedural elements relating to protocols that Fujitsu employees were asked to follow.

Image source, Post Office inquiry

The conversation is moving towards Fujitsu's fraud litigation and support office - which was designed to help with the prosecutions of sub-postmasters and postmistresses.

Again, this is very technical, but Patterson speaks about how the company gathered audit trail data - which he says should have been no more than a record of transactions at a given branch of the Post Office.

Patterson describes the process of collecting and dealing with the information from the Post Office, saying that the company could "filter out or add data" to it.

"Do you accept this meant that Fujitsu could and did alter the audit trail data?" asks the inquiry counsel.

"I think it does mean that, yes," replies Patterson.

Sam Hancock
Reporting from the inquiry

The tone of a public inquiry - like this one questioning Paul Patterson today - is certainly different to that of a House of Commons select committee, where the same Fujitsu executive appeared on Tuesday.

It's slower, more technical and has a much closer focus on the detail. That's apparent as inquiry lawyer Jason Beer takes Patterson through a selection of bugs, errors and defects (BEDs) found in Fujitsu's Horizon IT software.

One we've been shown was reported in 2000, less than a year after the system was rolled out by the Post Office. Asked if it's fair to say BEDs "afflicted" Fujitsu's Horizon system for two decades, Patterson answers simply "yes".

I'm sat a few rows back from the legal teams of former sub-postmasters and postmistresses. They're taking notes nearly constantly. No doubt they'll come in handy if lawyers are given the chance to ask Patterson questions at the end of the day.

Howe+Co, a firm representing more than 200 former sub-postmasters, have shown some of us a letter they sent to Patterson yesterday asking him to meet and speak to them and their clients today. They say they've had no response.

Patterson is now asked when Fujitsu was aware that the evidence the Post Office was relying on to prosecute sub-postmasters had been affected by the bugs, errors and defects (BEDs) in Horizon.

Patterson does not answer directly, but says the company became aware "latterly" that this faulty evidence was being used for prosecutions.

Asked if the Post Office ought to have been aware, he replies: "Yes, I do".

Jason Beer KC asks why those BEDs were not raised in the witness statements provided by Fujitsu employees to the Post Office for their prosecutions,

"I do not know why," Patterson says. "On a personal level, I am surprised that was not included."

He also confirms that some references to BEDs were edited out of evidence "by others".

Asked if he thinks that was shameful, he says that was "shameful, appalling".

Image source, Post Office Inquiry

Inquiry chair Sir Wyn Williams interrupts proceedings to clarify if the Post office was immediately notified about problems in the Fujitsu software when they were detected.

Patterson replies that information about the "vast majority" of bugs and defects were shared, but adds that he does need to check about some specific examples that were raised.

The earliest bugs were known about in November 1999, Jason Beer KC points out, and the latest was May 2018. So was the software plagued by bugs and defects for a period of nearly two decades?

"Yes," replies Patterson.

And Fujitsu knew of the bugs, errors and defects very soon after Horizon was rolled out, says Beer.

"Yes," replies Patterson again.

The inquiry is still looking at some of the specific bugs, errors and defects associated with Horizon.

In one surprising instance, inquiry counsel Jason Beer KC points to issues that arose when a sub-postmaster would attempt to correct a transaction.

Rather than minus the amount no longer needed, a bug in Horizon would "double up" the sum the sub-postmaster was trying to reverse out - referred to as "remming out".

According to Beer, this was down to a Fujitsu employee coding this element entering the wrong mathematical symbol - a plus rather than a minus.

In one incident, a sub-postmaster reported the amount they attempted to remove doubling to more than £27,800.

Here's the moment Fujitsu boss Paul Patterson apologised at the start of today's inquiry.

Patterson promised to "engage with government" regarding compensation for Horizon victims.

Inquiry counsel Jason Beer KC is focusing on specific bugs in the Horizon software, which was created by Fujitsu and used by the Post Office.

Patterson confirms that one of the bugs in the system existed for six years - despite Fujitsu knowing about it.

They discuss another issue which first began in 2003, which had originated from an attempt to fix an earlier bug.

Beer goes on to discuss a few more such bugs, and it is revealed that several errors were detected by the company, but it took time - often years - before they were fixed.

We're in a very technical phase of the discussion at the moment.

Inquiry counsel Jason Beer KC is running through parts of Patterson's 193-page witness statement - dated 29 December 2022.

The focus is on 29 bugs, errors and defects - or BEDs - found in the Horizon software made by Fujitsu and rolled out by the Post Office.

Patterson confirms that "right from the very start" there were "bugs, errors and defects" with the Horizon software which were "well known to all parties".

Some individual cases will be gone through in more detail shortly, Beer tells the inquiry.

Image source, Post Office inquiry

Betty Brown, 91, and her husband spent more than £50,000 of their savings to cover the money that Fujitsu's faulty Horizon software claimed they stole.

Located in a former mining village in Annfield Plain, County Durham, Mrs Brown's Post Office was known as one of the areas most successful branches.

However, the first time Horizon was used in her branch, it showed a deficit of £500 and thereafter would show regular shortfalls of £1,500.

Reflecting on her feelings at the time Betty said that it "changed me from being a happy, outgoing person into someone who is absolutely tied up in knots inside, shaking."

Betty - the oldest victim of the Post Office scandal - said she is "disgusted" with delays to compensation.

Chancellor Jeremy Hunt told the BBC that the government would "find the money quickly" for sub-postmasters who are still waiting for compensation.

• You can read the full story here

Sam Hancock
Reporting from the inquiry

There was quite a lot to take in there in those opening minutes.

After Paul Patterson was sworn in, inquiry lawyer Jason Beer KC made a point of saying that the evidence Patterson will give today will not be an extension or repeat of what he told MPs on Tuesday.

Beer also highlighted the fact that Patterson's appearance here today makes him the first senior Fujitsu executive to give evidence to the Post Office inquiry since it began in 2021.

The room we're in has slowly filled out - including a flurry of journalists who arrived just as proceedings got under way.

So far the lawyers and former sub-postmasters here today, and the people watching on who aren't part of the media, have been fairly unanimated. No one appeared to react when Patterson issued another apology on behalf of Fujitsu, just before questions began.