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Claim Nos. HQ16X01238, HQ17X02637 & HQ17X04248
The Post Office Group Litigation
IN THE HIGH COURT OF JUSTICE
QUEEN’S BENCH DIVISION
BETWEEN:
ALAN BATES & OTHERS
—and—-
POST OFFICE LIMITED
Defendant
SKELETON ARGUMENT FOR POST OFFICE
CMC ON 22 FEBRUARY 2018
Suggested pre-reading (2 hours): (1) Skeleton Arguments, including exhibits; (2) Draft Orders
proposed by each party
References to the Case Management and Hearing Bundles are in the forms
[CM/Volume/Tab/page] and [HB/Tab/page], respectively.
At Introduction
1, This is the Skeleton Argument for D (“Post Office”) for the CMC on 22 February 2018. The
CMC is the continuation of the CMC that was adjourned on 2 February 2018. A draft order
from that CMC was provided to the Court on the same date. Para. 27 of the draft order
provides for the present hearing to address any outstanding questions as to disclosure for the
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Common Issues Trial in November 2018, to identify the issues for trial in March 2019 and to
give directions in preparation for that trial,
2. There has been some progress towards agreement on technical Horizon-related issues for trial
in March 2019. Nonetheless, there do remain significant areas of disagreement as to how
best to have a useful and focused trial of the kind proposed by the Court.
3. The position as regards generic disclosure for the Common Issues Trial remains
unsatisfactory. Despite the Court’s ruling on 2 February that the disclosure should be under
Model C of the Disclosure Practice Direction’, Cs have continued to press for the broad and
unfocused disclosure that they sought under Model D.
4, Post Office seeks an order in the form of its proposed Schedule 2 (HB/13/16) and an order
for the March 2019 trial in the form at HB/13/21.
5. In this Skeleton Argument, Post Office addresses:
a. the background to the present hearing — Section B;
b. disclosure — Section C;
c, issues and directions for the Horizon technical issues trial in March 2019 -Section D,
B: Background to the present hearing
Disclosure
6. At the last hearing, there was a dispute of principle as to the scope of disclosure that should
be required of Post Office for the Common Issues Trial. It is this disclosure that is the subject
of Schedule 2. In short:
a. Post Office argued that the disclosure should be under Model C as identified in the
Disclosure Practice Direction and should be limited to documents that may provide
admissible evidence for the resolution of the Common Issues, principally matrix of fact
' The draft Practice Direction for the Disclosure Pilot for the Business and Property Courts, which shall
apply under para. 5 of the draft order, which is agreed.
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evidence. It relied on the well-established orthodoxy as to admissibility of evidence for
the purposes of contractual construction.
b, The Cs sought much broader disclosure, to be given in accordance with Model D, arguing
that the disclosure should cover not only the terms of the parties’ agreement but also what
in fact happened in the course of their relationship. Cs invited the Court to order broad
generic disclosure that would bring a “measure of generic reality as to what was going
on’?
c. The Court ruled that the disclosure should be under Model C.
7. Having determined that the disclosure should be given under Model C, the Court asked the
parties to agree the categories of documents to be covered by the disclosure searches for each
of the identified disclosure issues in Schedule 2. Post Office respectfully asked the Court to
provide some guidance as to what, if any, further categories should be added to those in its
draft Schedule 2. The Court indicated that it was for the Cs to make requests for further
categories to be added and that it would be surprised if they, having benefitted from the to-
and-fro with the Court in argument, “were to try and weave a model D approach by putting a
whole bunch of categories in model C which actually, when you look at them, [it] is just a
rehash of [...] model D”. I
8. Following the hearing, the parties made some progress in agreeing additions to Post Office’s
proposed Schedule 2: see the email dated 8 February at HB/16/92.
9. On Friday 9 February, however, the Cs requested by letter a further 33 categories of
documents. Many of the requests were extremely broad and were very similar to the requests
that the Cs had advanced for Model D disclosure before the last hearing. The Cs sought
disclosure of many documents limited only by reference to their content or subject matter,
rather than by document type or any other narrowing factor as required for Model C
disclosure.
? Transcript, page 17H ~ 18A.
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10, Post Office responded on Tuesday 13 February 2018: HB/16/66. Post Office objected to the
i.
Cs’ approach on the basis that it involved the same problems as faced by its Model D
disclosure.
Cs provided revised proposals late on Monday, 19 February. In the revised proposals, they
made minimal concessions, whilst retaining a large number of broad and unprincipled
disclosure requests.
March 2019 trial
12,
13.
At the last hearing, the Court indicated that it was not prepared to vacate the March 2019
hearing and that it was unpersuaded that it would not be possible to identify sufficiently
discrete and focussed issues for such a trial.
The Court invited the parties to consider, in particular, whether it might be possible to use the
trial window to determine certain technical issues in relation to the Horizon system. In light
of concerns then expressed by the parties as to the breadth of the issues on the pleadings that
relate to Horizon (including matters as to training and issues of breach?), the Court provided
the following guidance:
a. The March 2019 trial should not be of all issues relating to Horizon.
b. The focus of the trial should be on technical issues that are suitable for determination on
expert evidence and that go to the basic functioning and reliability of the system.
See transcript, page 35E-F and page 36E.
.On 15 February, Post Office put forward 11 Horizon issues with cross-references to the
generic pleadings: HB/17/111. It provided with the issues a draft order containing directions
for trial, including a staged process for expert evidence. Post Office proposed issues that are,
insofar as practicable, limited to matters that could be resolved on expert evidence and
without the need for lead claimants or extensive factual background.
3 See, for example, transcript page 32C-E and page 35F-36A.
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15. The Cs responded on 19 February: HB/17/112. The Cs’ proposed issues were wide-ranging
and fact-sensitive, and are largely not suitable for determination at a Horizon issues trial
focused on expert evidence.
Cc: Disclosure
16, The Court will recall that broad disclosure is to be given in relation to the Lead Claimants for
the Common Issues Trial. Post Office made clear at the last hearing that this disclosure
would likely extend well beyond those documents that would be admissible for the purposes
of contractual construction but that it had sought to reach a pragmatic compromise in light of
Cs’ extremely broad requests and the current absence of any proper pleading as to matrix of
fact. The Cs will receive very large quantities of documentation, which will fully cover any
matters which could even arguably constitute part of the factual matrix (and some matters
which could only have, at best, forensic relevance and which will be inadmissible at the
Common Issues Trial).
17. Post Office’s proposals for the Model C disclosure under Schedule 2 are also broad and were
offered, in part, in a spirit of pragmatic compromise. Under its Schedule 2 proposals, Post
Office would anticipate disclosing, in addition to the documents relating to the Lead
Claimants under Schedule 1, around 100,000 — 200,000 documents. This is an extraordinary
amount of disclosure to be provided for the purposes of determining the nature and content of
the parties’ contractual relationship (being principally matters of contractual construction),
taking into account the following:
a. For almost all of the issues, any evidence as to what in fact occurred after the agreement
was entered into (or, where relevant, varied) will be inadmissible: see, for example,
Arnold y Britton [2015] A.C. 1619 at [21] per Lord Neuberger. Post Office anticipates
that much of the evidence that the Cs may wish to lead will be inadmissible and liable to
strike-out.
b. It is true that there are Common Issues that go beyond matters of contractual
construction. But they are very limited in scope: see Common Issues 17 and 18, relating
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to the “true agreement”
between the parties as to the circumstances in which Post Office
could lawfully terminate the agreements.” The Court in November will not be concerned
with the facts as to what happened in terms of training, the operation of the Helpline, the
discovery and investigation of shortfalls, the operation of Post Office’s financial systems
and client accounting, etc.
c, The Common Issues trial is a trial of Lead Claims. In the unlikely event that any broader
disclosure might shed light on the construction of the Lead Claimants’ contractual
relationships with Post Office, such disclosure is to be provided in any event under
Schedule 1.
18. Post Office has sought to reflect in its proposals the need for Model C disclosure to proceed
by reference to “narrow classes of documents relating to a particular Issue for Disclosure”
(Practice Direction, page 7; emphasis added). It is not appropriate to request, as Cs do,
categories of document that are defined only by the information that they contain. A request
for all material relating to a particular subject matter is not a proper request under Model C, It
would not enable Post Office to make focussed searches and keep the disclosure process
within manageable bounds, taking into account the short period of time available.
19, The requests which remain in dispute are set out in the summary document exhibited to this
Skeleton Argument. It is anticipated that, if the Cs maintain these Requests, it will be
necessary at the upcoming hearing to go through each of them with the Court. Broadly,
though, three overarching observations fall to be made:
(a) The proper scope of factual matrix disclosure should not be in doubt (and if there was any
doubt, it ought to have been removed by the discussion at the last hearing). Matters
which occurred after the entry into, or (where relevant) variation of, the relevant contracts
cannot be relevant to their proper construction. Similarly, no material which was only
within the purview of one party to a contract can be relevant to its interpretation. The
purpose of the Common Issues Trial is to establish, in the context of the upcoming Lead
Claimants’ trial, the meaning of the relevant contracts. The disputed requests have no
* Post Office's position is that the exceptional principle in Autoclenz v Belcher [2011] UKSC 41 has no
possible application to business-to-business relationships of the kind at issue in these proceedings.
*See paras 69-71 of the AmGPoC: CM/V 1/3/39.
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relevance to that exercise; as opposed to, for example, the subsequent exercise of
determining whether there was breach of the obligations as determined in the Common
Issues Trial.
(b) In their letter of 19 February, the Cs suggest that disclosure going beyond the factual
matrix is required. They observe that one issue in the Common Issues trial will be as to
the ‘burden of proof’, ie. whether, under the relevant contracts, the Post Office is
entitled, in the absence of evidence to the contrary, to treat any shortfall as being the
responsibility of the relevant Subpostmaster. The Cs note that Post Office’s pleading on
this point makes reference to background facts such as the Post Office’s difficulty in
knowing what explains any given loss. They argue that this justifies wide-ranging
disclosure on related matters. That is wrong. The only matters relevant to the proper
construction of the contract (as to burden of proof or anything else) are matters which
were publicly known or ‘crossed the line’ between the parties — including what both
parties knew about the difficulties for Post Office in determining the cause of a shortfall.
But if some internal Memorandum at Post Office lamented how difficult it was to
determine the cause of a shortfall, that would not be a reason for construing the contracts
in the way that Post Office submits they should be construed, i.e. with ‘burden of proof’
on Subpostmasters. The converse is equally true — some internal Memorandum privately
lauding the ease of investigating shortfalls would not assist the Cs’ case on construction.
(c) The Cs have withdrawn a number of requests on the basis that further disclosure, in
respect of the March 2019 trial or otherwise, is anticipated. For the avoidance of doubt,
Post Office does not make any concession in the context of this hearing as to whether any
such disclosure should be made, and its position is entirely reserved.
20. To take specific examples from Cs’ requests:
(a) Requests c and d cover documents that could only shed light on Post Office’s subjective
views as to the construction of a contractual provision. Such evidence would be
inadmissible and is irrelevant.
(b) Request e relates to discussions between Post Office and Fujitsu as to bugs, errors or
defects in Horizon. It is entirely irrelevant to the construction of the parties’ agreements.
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(c) Request f is extremely broad (covering all “instructions”, irrespective of the class of
document in which such instructions might be provided) and relates in any event to
accounting operations in practice, rather than shedding any light on the construction of
the agreements. Similar comments apply to request 37.
(d) Request i proceeds on a fundamental misunderstanding of Post Office’s case on the
burden of proof: see paragraph 19(b) above.
. Post Office has sought to scope the disclosure by reference to the evidence that might
plausibly be admissible and useful in the resolution of the Common Issues. It has focussed
on disclosure that might plausibly bring to light documents that could assist in identifying
facts known to the parties at the time of agreeing the contractual documents (and variations
to those documents) and that might assist in construing the express terms of the agreements
and/or determining whether or not an alleged implied term is necessary. In doing so, Post
Office has already gone beyond what is admissible evidence at the Common Issues trial and
has volunteered disclosure of other classes of documents where they can be narrowly
defined.
. Post Office has gone very far towards accommodating the Cs’ desire for extensive generic
disclosure. It resists strongly any attempt to rely on its pragmatic approach to divorce the
Stage 2 disclosure process from the resolution of the Common Issues which was its intended
purpose.
D: Issues and directions for the trial in March 2019
Issues
23.
At the last hearing, the Court gave clear guidance as to the proper scope of the March 2019
Horizon Issues trial. The Judge indicated that, while the trial should not focus on “every
single issue that arises from Horizon”, there could be a trial of “fundamental Horizon points
on the pleadings about how it works or how it does not work’: Transcript, 35F. The
instructions which the Court gave to the parties were to “either agree or each propose an
isolated number of issues on the pleadings related to Horizon that would involve expert
evidence, but not evidence of individual cases”: Transcript, 36E.
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24. All of the issues proposed by Post Office obey this guidance. While the Cs’ issues overlap to
25.
some extent with Post Office’s (and to that extent there is a measure of substantive
agreement) they stray well beyond the proper subject matter of expert evidence, and into
areas requiring significant factual evidence.
A table is exhibited to this Skeleton Argument showing the key points of comparison on an
issue-by-issue basis, including where, in the interests of being as accommodating as possible,
Post Office can accept some part of the Cs’ proposals. However, as that table indicates, the
Cs’ proposed issues are frequently focused on questions going far beyond the proper and
manageable scope of the Horizon Issues trial:
(a) Horizon is designed to transfer and store the data put into it. It does not create shortfalls
or reconcile errors — those are accounting matters, not IT matters. Questions about
accounting matters are not appropriate for a trial focused on Horizon, and could not result
in any sensible answer from an IT expert. This fault affects, in particular, the Cs’ Issues 1
and 5.
(b) A number of the Cs’ proposed issues focus not on how Horizon works, but on the factual
context in which it is operated. For example, proposed Issue 8 asks whether
“Subpostmasters have the means reasonably to identify whether such bugs, errors or
defects in Horizon...were the cause of [any] shortfall’. Issues 9 to 12 are expressly
concerned with the relationship between Post Office and Fujitsu, which cannot be
relevant to the technical question of how Horizon works. Issue 14 asks how often Post
Office/ Fujitsu in fact used whatever abilities they had to adjust data, rather than what
such ability may be. Issue 15(b) asks about what Post Office knew, and what it told
Subpostmasters. These issues, insofar as they are relevant at all, go to breach ~ and are
only suitable to be resolved in lead cases which will involve substantial factual evidence.
They are inappropriate for a trial focused on how Horizon works.
(c) Other proposed issues are focused on the consequences of alleged defects. The Cs’ Issue
7(i) asks whether particular bugs or defects caused shortfalls to Post Office. Issue 15(a)
asks to what extent any ability remotely to alter data affected the reliability of accounting
balances. These issues are similarly directed to Post Office's accounting and operating
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practices and are inappropriate for a trial focused on how Horizon works as a technical IT
question.
(d) Insofar as the Cs’ proposed issues are focused on the correct subject-matter, they are
frequently far too broad and/or nebulous. Issue 1 requires an analysis of every single
upgrade to Horizon, however minor. Issue 3(c) brings in a potentially vast number of
communications with third parties. Issue 6 (“To what extent did bugs, errors or defects
occur in the Horizon system?) is not apt for judicial determination and does not focus on
the types of bugs or errors that might be relevant to the Claims. The Horizon Issues trial
needs to be rigorously focused on issues which can, following expert evidence, admit of a
clear answer, and which will assist in resolving the Claims. Issues which ask the Court to
rate the prevalence of errors on an undefined scale, or which bring in large quantities of
irrelevant material, will not aid that purpose.
Directions
26. As the Court will see from comparing the parties’ proposed draft Orders, there is a broad
measure of agreement on next steps. There are a number of differences on points of detail
(such as when the Horizons Issues trial should be held). More significantly, there are three I
key points in dispute:
(a) The Cs’ draft Order deletes the requirement, set out in Post Office’s draft Order, that the
Cs should, via their expert, set out their case on what relevant faults existed in the
Horizon system. This is essential, in order to provide a framework within which the
debate at the Horizon Issues trial can take place and to draw out points on which the
Court can reach clear decisions. In the absence of provisions to this effect, the Court will
be left with an unfocused inquiry into a very large IT system without a stated objective.
(b) Post Office’s draft Order proposes a detailed timetable leading up to the Horizon Issues
trial, including the service of expert reports, supplemental expert reports, and a joint
memorandum. The Cs have not included any such timetable in their draft Order. It is a
practical necessity that a timetable should be ordered, and dates reserved in the experts’
diaries given that detailed reports will need to be produced on short notice and within an
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overall litigation timetable that has little tolerance for delays. The Cs’ opposition to this is
unexplained.
(c) The Cs have added, to paragraph 4 of the draft Order, requirements that Post Office
should demonstrate how it identified and corrects shortfalls (para 4(a)(ii)), and how it
compares its records against the records of Post Office clients (para 4(a)(iii)). For the
reasons given above, none of this is relevant to the question of how Horizon works, and
there is no reason to add these provisions. The Cs also propose (para 4(a)(iv)) a
demonstration of how data can be edited. It is difficult to see how such a demonstration
could assist in the determination of any issue in dispute; nonetheless, in the interests of
being pragmatic and cooperative, Post Office is prepared to agree to the inclusion of this
provision.
DAVID CAVENDER QC
OWAIN DRAPER
GIDEON COHEN
One Essex Court,
Temple
20 February 2018
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Claim Nos. HQ16X01238, HQ17X02637 & HQ17X04248
IN THE HIGH COURT OF JUSTICE
QUEEN’S BENCH DIVISION
The Post Office Group Litigation
BETWEEN:
ALAN BATES & OTHERS
Claimants
-and—-
POST OFFICE LIMITED
Defendant
SKELETON ARGUMENT FOR POST OFFICE
CMC ON 22 FEBRUARY 2018
Solicitor for Post Office:
Andrew Parsons
Womble Bond Dickinson (UK) LLP
tr
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ebiziyso
Exhibit 1
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SUMMARY OF AGREED AND DISPUTED CLASSES OF DOCUMENTS
ISSUE FOR I PLEADING I AGREED CLASSES OF CLAIMANTS' ADDITIONAL DEFENDANT'S COMMENTS ON
DISCLOSU I REF DOCUMENTS REQUESTS WHICH ARE REQUESTS WHICH ARE OBJECTED TO
RE (info only) © Defendant's original classes of OBJECTED TO BY THE 2 a é
. DEFENDANT
documents are set out in black.
© Classes / words which are
underlined are additions
proposed by the Claimants and
accepted by the Defendant.
nN
+ roducts GPOC 4—5, 15 1. Indexes, organisational charts, a) Policies, manuals, process Request A
nd ; GDef 24 - 25 schedules or diagrams of the suite documents, setting out This request goes to issues of breach and
services of products and services offered procedures to be applied relates to information that is not factual
offered by Reply 20 by Post Office since 1999 between Post Office and its matrix. It calls for information that is not
on 2. Written policies and process chients for dealing win needed for and would not be admissible at
ee. documents relating to the rolling lose Shortfalls or the Common Issues trial.
out of products and eo ices to ‘ This request also relates to the financial
Postmasters since . reconciliation process and other operational
activities undertaken by Post Office.
Post GPOC 8-10 3. Suite of standard contractual b) Minutes of management Requests B,C & D
Office's GDef 28 - 31 documents used by PO when meetings to discuss the _ Post Office's internal and subjective views
standard appointing postmasters, since variation of postmasters on its contract terms are not relevant factual
contract 1999. contracts nationally insofar as matrix given that these views would not
terms such variations concerned or
4. Suite of product or service-
impacted upon the operation or
have been known to postmasters.
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N
an
specific contracts between Post
Office and postmasters and
guidelines, referred to in the
reports of Second Sight.
Contractual variations issued to
the branch network since 1999.
Written policies and process
documents relating to the process
of varying a postmaster's contract.
Standard and template documents,
letters, notes and memos issued to
postmasters relating to the
variance of their contracts.
c)
i)
use of Horizon, branch
accounts and/or discrepancies
and shortfalls that may arise
therein.
Minutes of management
meetings in which the
operation and effect of section
12, clause 12 of the standard
contract was considered or
discussed.
Standard guidance, rules, or
Instructions to Managers /
Contract Advisors regarding
the operation and effect of
section 12, clause 12 of the
standard contract.
"Management" and "Managers" have a
potentially broad meaning as, like all major
corporates, Post Office has layers of
management who regularly attend
meetings.
"Standard guidance, rules, or Instructions"
could be interpreted very broadly if this
were to include guidance, rules or
instructions issued by email.
It is unlikely that Post Office's management
team would have discussed the operation
and effect of a specific contract term
without the advice and / or presence of a
lawyer. If these documents do exist, they
are likely to be privileged.
a .
\ppointment
of
postmasters
GPOC 42 - 46
GDef 78 - 82
Written policies and process
documents relating to:
a.
the advertising for
vacancies (permanent and
temporary)
the postmaster
application processes
the on-boarding process
(including the provision
of contracts)
checks on postmasters
prior to appointment
upfront payments made
by postmaster to Post
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Office; and
f. deductions from
postmasters remuneration
upon a postmaster joining
Post Office
Standard and template documents,
letters, notes and memo issued to
postmasters before or shortly after
appointment as a postmaster.
Operation of
Horizon
LTE
GPOC 12-17,
22 — 24, 25-28
GDef 33 - 38,
57-60
Reply 9, 36, 41
10.
11.
12.
13.
14,
Technical documents regarding
Horizon stored by Fujitsu in its
Dimensions systems (subject to
Post Office using its best
endeavours to give disclosure of
those documents that are under
Fujitsu's control).
Known Error Log (subject to a
suitable means of inspection being
agreed).
Branch Operating Manual
(including previous versions or
equivalent historic document).
Operating instructions and rules
issued to all postmasters.
Minutes of meetings of Post
Office's board of directors (or
historic equivalent) (a) between
1999 and 2001 at which the roll-
out of Horizon, its operation and
any associated operational risks
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were considered or discussed, and
'b) between 2010 and 2011 at
which the same was considered or
discussed with respect to Horizon
Online, limited in each case to
matters associated with financial
reconciliations. shortfalls.
discrepancies or losses.
Fujitsu
8Tz
GPOC 20-21
GDef 47 - 50
Reply 9.6(e), 44
and 45
. Contract between Post Office and
Fujitsu (ICL) for Horizon and all
written contractual variations to it.
e)
Minutes of meetings between
Post Office and Fujitsu at
which any known or suspected
bugs, errors, or defects (of the
nature referred to at paragraphs
22 to 24 of the Amended.
Generic Particulars of Claim)
were considered or discussed,
including the Calendar
Square/Falkirk issues,
Payments Mismatch issue, and
Suspense Account bug.
Request E
This request goes to technical questions
about Horizon and / or issues of breach. It
is not factual matrix. It calls for
information that is not needed for and
would not be admissible at the Common
Issues trial.
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Lbiziv'8
accessing transaction information
through Horizon.
Informatio GPOC 14.2 and 16. Technical documents regarding f) Written instructions to Request F
n available 19.3 Horizon stored by Fujitsu in its Managers and Trainers : : oo
to Di : tems (subject tl resardine the availability and This Tequest goes to technical questions
GDef 35, 76(6),I mensions Systems (Subject to egarelmg the availability an about Horizon and / or issues of breach. It
postmasters Post Office using its best provision of transaction . .
regarding 92-93 endeavours to give disclosure of information to postmasters. Is not factual matrix. It calls for
transaction Reply 11, 14.2 - those documents that are under ° information that is not needed for and
5 14.4, 15, 16.1 Fujitsu's control) g) Internally and externally would not be admissible at the Common
produced management Issues trial.
17. Branch Operating Manual information, reports and
(including previous versions or briefing papers containing
equivalent historic document). information and data relating to Request G
18. Any written policies or process the aggregate volume, value This request goes to issues of breach and
documents regarding the and nature of Transaction relates to information that is not factual
completion of branch accounts in Corrections issued annually matrix. It calls for information that is not
the period immediately before since 1999. needed for and would not be admissible at
Horizon was introduced. the Common Issues trial.
XN 19. Any guidance notes or written Notwithstanding this, Post Office is open to
ire) advice issued to postmasters on considering whether the information sought
could be provided through another means.
The raw transaction correction information
is generally held within the POLSAP
finance system. It might therefore be
possible to run queries on the raw database
to create documents containing the
information sought. As this requires
documents to be created, this is not an
appropriate request for disclosure. Post
Office is willing to discuss this matter
further in correspondence at an appropriate
stage but this information is not needed for
the Common Issues trial.
BLiziv'so
Informatio
n available
to Post
Office
regarding
transaction
s
0zZ
GPOC 55
GDef 76(4)-(6),}
92 - 93
Reply 46, 47
———
h) Written policy and process
documents, guidance, notes or
memoranda relating to:
i. The ability of Post
Office (whether itself or
by Fujitsu) remotely to
detect the occurrence of
shortfalls or other branch
account discrepancies,
when the same occurred
and whether those
discrepancies were
caused by bugs, errors
and/or defects in the
Horizon system;
ii. the ability of Post Office
and/or Fujitsu to conduct
transactions, (by
entering, deleting or
otherwise altering the
same) in postmasters’
branches remotely;
iii. specific authorization to
conduct such
transactions;
iv. the exercise of any such
ability referred to in a.
above;
v. _ the use of “Global User”
authorization by Post
Office employees and/or
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contractors;
Request H
This request goes to technical questions
about Horizon and / or issues of breach. It
is not factual matrix. It calls for
information that is not needed for and
would not be admissible at the Common
Issues trial.
Request I
This request goes to issues of breach and
relates to information that is not factual
matrix. It calls for information that is not
needed for and would not be admissible at
the Common Issues trial.
The reference to "instructions" is very
broad and would likely include emails
between a large number of Post Office
employees.
This request could be agreed if narrowed in
scope using the following wording, but this
has been rejected by the Claimants: "Any
written policies or process documents
regarding the recovery of shortfalls from
postmasters."
Request J
This request goes to issues of breach and
relates to information that is not factual
matrix. It calls for information that is not
needed for and would not be admissible at
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vi. _ the use of “privileged
user access rights” by
Fujitsu employees
and/or contractors; and
vii. Balancing Transactions.
the Common Issue trial.
This request is extremely wide. For
example, it would potentially capture all
internal and external emails regarding all
shortfalls and losses in all branches, not just
those of the Claimants. This request would
also extend to a large number of Post Office
i) Any written policies or process teams as many teams have an active role in
documents and network-wide handling discrepancies, shortfalls and
instructions to Managers / losses.
Contract Advisors / Auditors A narrower formulation of this request can
regarding the recovery of be found at 25, 26 and 27. Although these
shortfalls from postmasters. documents may still be inadmissible the
j) Minutes of meetings / Defendant is prepared to disclose them as
memoranda / reports relating to I part of Stage 2 Disclosure because they are
tw Post Office’s network-wide narrowly defined.
Nu approach to identifying,
e tracking or managing
discrepancies, shortfalls or
losses, or to Postmasters’
ability to dispute shortfalls.
Transaction I GPOC 18 20. Branch Operating Manual k) [Claimants' version of request Request K
Corrections GDef 39 — 41 (including previous versions or 22] Post Office written This request could be agreed if narrowed in
Reply 21, 32 equivalent historic document). policies, and process dance scope using the following wording, but this
> 21. Operating instructions and rules and brie fing notes ree ardine has been tejected by the Claimants: "Post
issued to postmasters in relation to the issuing of Transaction bd Office written policies, and process
Transaction Corrections. hd documents, and formal internal guidance
22. Post Office written policies and Corrections. documents (not emails) regarding the
process documents regarding the
issuing of Transaction
Corrections.
issuing of Transaction Corrections."
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Declaring,
Making
Good and
Disputing
Shortfalls
ZeZ
GPOC 19.1 —
19.3
GDef 44 - 46
Reply 9.3, 22
23.
24.
25.
26.
27.
Branch Operating Manual
(including previous versions or
equivalent historic document).
Guidance notes issued to
postmasters on how to complete
overnight cash declarations and
Branch Trading Statements.
Guidance notes issued to
postmasters on how to make good,
settle centrally and dispute
shortfalls, including, but not
limited to, outside of the 42/60
period.
Written policies regarding
postmasters making good and
settling centrally shortfalls.
Written policies or process
documents regarding the reports
which could be run or steps taken
by postmasters to investigate
shortfalls.
Training
GDef 17, 61(2),
(4), 3)
Reply 42 - 43
28.
29.
Written policies and process
documents relating to the
provision of training when a new
postmaster joins Post Office, from
1999.
Written policies on when further
1) Policies, instructions and
guidance notes issued network-
wide to trainers related to
training on Horizon and
Horizon Online.
m) Course materials focusing on
Requests L & M
This request goes to issues of breach and
relates to information that is not factual
matrix. It calls for information that is not
needed for and would not be admissible at
the Common Issues trial. In particular, it is
Lzz/p'8,
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30.
31.
training is offered due to the
introduction of new products and
services.
Training materials and other
standard / template documents
used for new postmasters.
Written policies or process
documents relating to ongoing
training which is provided due to
the needs of postmasters or the
introduction of new practices,
systems or services.
n)
the dealing with or disputing of
discrepancies.
Network-wide instructions to
Post Office trainers in how to
train a postmaster to deal with
and dispute a shortfall.
noted that the Claimants have not pleaded
in the GPOC that the training of
postmasters forms part of the factual
matrix.
Given that the vast majority of all branch
operations are conducted through Horizon,
this is effectively a request for all policies
and process documents on all elements of
training over an 18 year period.
Post Office has already included at requests
28 to 31 information on training that is at
least proximate to the factual matrix needed
for the Common Issues trial — relating to
the training for new postmasters and the
introduction of new products.
Request N
This request appears to go to allegations
that the training provided was defective and
/ or the trainers provided misleading
information. Post Office's response to
Requests L & M is repeated.
The reference to "instructions" is very
broad and would likely include emails
between a large number of Post Office
employees.
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Helpline GPOC 29 - 30, 32. NBSC Knowledge Base (subject 0) [to be included at the end of Request O
57-58 ° a suitable rethod of inspection % structions e pot This request goes to issues of breach and
GDef 61 - 62 eing agreed). ep as fe mee mg ve relates to information that is not factual
Reply 18 - 19 33, Written policies and procedures ean ah ne ile asters matrix. It calls for information that is not
regarding the operation of either regarding shorttalls. needed for and would not be admissible at
the NBSC or HSD helplines, the Common Issues trial.
including but not limited to (a) the on cone" i
. : The reference to "instructions" is very
operation of the escalation « + .
7 broad and would likely include emails
process. particularised at
: between a large number of Post Office
aragraphs 61-62 of the Generic employees.
Defence (excluding criminal ployees.
investigations).
34. Formal notices issued to
postmasters regarding the
operating hours of helplines.
Nn
N
= westigation I GPOC 31 35. Written policies and procedures
8 . regarding the investigation of
GDef 63 - 64 shortfalls in branches (excluding
Reply 23 - 24 investigations into suspected
criminal misconduct).
36. Written policies and procedures.
for initiating and progressing
audits.
37. Instructions or guidance
excluding emails) given to
auditors on dealing with
discrepancies. shortfalls and
losses identified or suspected in
branch.
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Termination
GPOC 32 — 33
GDef 65 - 66
38. Written policies and process
documents relating to:
a. the suspension of
postmasters; and
b. the termination of
postmaster's contracts
(and any connected.
appeals process).
Suspense
Accounts
SZ
GPOC 38 - 39
GDef 73 - 74
Reply 29 -33
39. Written policies and process
documents in relation to the
operation by Post Office of any
"suspense" account associated
with branch accounting,
account or accounts in which
unattributed surpluses generated
from branch accounts (such as, for
example, perceived overpayments
by banks in respect of particular
transactions) were placed and,
after a period of 3 years. credited
to Defendant’s profits and
reflected in its profit and loss
accounts.
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Assistants GPOC 43, 56 40. Written policies and process
and 74 documents relating to the
GDef 79, 95 andl appointment and registration of
_ assistants.
116
41. Training materials provided to
postmasters for the training of
assistants.
N
vu
a
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Lt
Exhibit 2
Defendant's commentary on proposed Horizon Issues
Defendant's issues
Claimants' issues
Reasons for objection to the: :
Claimants' issues.
1. Is Horizon robust and extremely
unlikely to be the cause of shortfalls in
branches?
2. When it was introduced in
1999/2000, did Horizon have poor
checks and controls against preventing
data entry errors by users when
conducting transactions?
1. Did the introduction of (or subsequent changes to)
Horizon (including upgrades and addition of products and
services) import the potential for errors to be made during
data entry or at any point thereafter including transfer,
processing, reconciliation or recording?
Reconciliation is not a Horizon
process. Horizon does not create
shortfalls or reconcile data, it only
transfer and stores data.
The remainder of the Claimants’
issue 1 is covered by the Defendant's
issues 3 and 6.
2. What error repellency measures and/or controls were in
place?
The Claimants’ issue 2 is covered by
the Defendant's issues 2 and 3.
3. Were the Horizon technical control
measures in place from time to time
such as to reduce to an extremely low
level the risk of error in the
transmission, replication and storage of
3. Were such error repellency measures and/or controls
sufficient to ensure the prevention, detection, identification
and reporting of errors? In particular, were they sufficient
to ensure:
The Claimants' issue 3(a) mixes the
concepts of user error with
transmission error.
3(b) is already covered in the
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Defendant's issues
Claimants' issues
Reasons for objection to the
Claimants' issues
transaction data?
a. repellency against (i) data entry errors and (ii) data
packet or system level errors (including data
processing, effecting and reconciling transactions and
recording the same);
b. _ the detection, correction and remediation of software
coding errors or bugs in Horizon;
c. — the absence of errors in the transmission, replication
and storage of transaction record data (whether by its
transfer to and from the Defendant’s central data
centres, to and from third parties or otherwise); and
d. the reliability of the data stored in the central data
centre as an accurate record of the transactions
entered on branch terminals?
Defendant's issues 6 and 7.
The reference to "third parties" in
the Claimants' issue 3(c) extends the
issue to reconciliation which, as
stated above, is not a Horizon
process.
3(d) is covered by the Defendant's
issues 2 and 3.
4. Were such Horizon controls,
procedures and practices in place from
time to time robust?
4. Atall material times, what report-writing features did
Horizon have?
The Claimants’ issue 4 is covered by
the Defendant's issue 11.
5. Are the circumstances in which
transaction data can be edited or deleted
without the consent of the
Subpostmaster limited as pleaded at
Defence paragraph 57?
5. To what extent, did those features allow
Subpostmasters:
a. to access, identify and reconcile transactions recorded
on Horizon;
b. to reconcile Horizon data with other transaction data
The Claimants’ issue 5(a) is covered.
by the Defendant's issues 9 and 10,
save that the reference to
reconciliation is outside the scope of
Trial 2 as it is an accounting process.
The Claimants' issues 5(b) and (c)
4A_38149621_2
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627
Defendant's issues
Claimants' issues
Reasons for objection to the
Claimants’ i issues
held by the Defendant; and
c. to investigate the cause of apparent or alleged
shortfalls?
are outside the scope of Trial 2 as
they relate to an accounting process.
Such issues are not technical issues
and would require lead claimants.
6. Does Fujitsu operate industry
recognised processes for developing
and updating Horizon and for investing
and resolving any identified potential
system errors?
6. To what extent did bugs, errors or defects occur in the
Horizon system?
The Claimants’ issue 6 is nebulous.
The Defendant's issues 6, 7 and 8
address the technical issues as to the
controls and measures for preventing
/ fixing bugs and developing the
system.
7. Which, if any, of the measures and
controls against software coding errors
and bugs pleaded at Defence paragraph
50 were in place at the times covered
by the Claims?
7. Did such bugs, errors or defects (including those
referred to at §24 of the GPOC and §§49 to 56 of the
Generic Defence) occur which (i) caused; or (ii) had the
potential to cause apparent or alleged shortfalls which did
not represent a real loss to the Defendant?
The Claimants’ issue 7 is covered by
the Defendant's issues 6, 7 and 8.
The Defendant takes issue with the
reference to "real loss" in the
Claimants’ issue 7.
8. Are the incidents of bugs and errors
8. Did Subpostmasters have the means reasonably to
The Defendant takes issue with the
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Defendant's issues
Claimants’ issues
Reasons for objection to the
Claimants' issues
admitted by Post Office consistent with
the operation of robust measures for the
detection, correction, remediation of
software coding errors and bugs in
Horizon?
identify whether such bugs, errors or defects in Horizon
(of the nature pleaded in GPOC at §18, 24 and Defence at
§§49 to 56) were the cause of the shortfall?
Claimants' issue 8, as this is an issue
for the lead cases and is not to do
with Horizon.
9. Did Post Office and/or Fujitsu have
access to all transaction data recorded
by Horizon?
9. What information:
a. was practically available from or provided to the
Defendant by Fujistu in relation to (i) bugs, errors
and defects; and (ii) remote access to the Horizon
system.
b. was the Defendant legally entitled to from Fujitsu, in
relation to the same?
The Claimants’ issues 9 (a) and (b)
are not questions to be addressed by
the experts.
10. What transaction data and reporting
functions were available through
Horizon to Post Office for identifying
shortfalls and/or the causes of shortfalls
in branches?
10. Was there any information for which the Defendant
had to pay Fujitsu?
The Claimants’ issue 10 is not an
expert question and is covered by
the Defendant's issue 9.
11. What transaction data and reporting
functions were available through
11. Ifso, what sums were payable for that information,
The Claimants’ issue 11 is not an
expert question and to the extent that
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Defendant's issues
7
Claimants' issues
Reasons for objection to the
Claimants' issues ~
Horizon to Subpostmasters for
identifying shortfalls and/or the causes
of shortfalls?
and under what circumstances?
it is related to an expert issue - it is
covered by the Defendant's issue 9.
12. Was it part of Fujitsu’s role to manage coding errors,
bugs, and fixes so as to prevent, manage or seek to correct
apparent discrepancies in the data, in a manner which
would potentially affect the reliability of accounting
balances, statements or other reports produced by
Horizon?
The Claimants’ issue 12 is covered
by the Defendant's issues 6, 7 and 8.
13. Whether the Defendant and/or Fujitsu have had the
ability/facility: (i) to insert or inject, (ii) to edit, or (iii) to
delete transaction data in branch accounts; (iv) to
implement fixes in Horizon that affected, or had the
potential to affect, specific items of transaction data; or (v)
to rebuild branch transaction data:
a. remotely;
b. without the consent of the Subpostmaster in question;
and
c. without the knowledge of the Subpostmaster in
question.
The Claimants' issue 13 is covered
by the Defendant's issue 5, although
the Defendant would be content to
add the words "insert and inject" to
their paragraph 5.
If the Claimants’ version is adopted,
the Defendant would also request
that the word "potentially" be
inserted at the start of issue 13(c).
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Defendant's issues
Claimants' issues
Reasons for objection to the
Claimants' issues
14. If the Defendant and/or Fujitsu did have such ability,
how often was that used, if at all?
The Defendant does not object to the
Claimants’ issue 14.
15. If and when the Defendant and/or Fujitsu used the
above ability:-
a. To what extent did the same affect, or have the
potential to affect, the reliability of accounting
balances, statements or reports?
b. To what extent:
i. was the Defendant aware of its use; and
ii. did the Defendant make Subpostmasters aware
of the same?
The Claimants’ issue 15(a) should
be amended as follows:-
If and when the Defendant and/or
Fujitsu used the above ability, to
what extent did the same have the
potential to affect the reliability of
transaction data, statements or
reports?
The Claimants' issue 15(b) amounts
to a factual enquiry and is opposed.
16. Did use of such facilities affect, or have the potential to
affect, the reliability of accounting balances, statements or
reports?
The Claimants’ issue 16 is the same
as their issue 15(a). The Defendant
therefore requests that this is deleted
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