NZ HERBERT
SMITH
Se
Ay FREEHILLS
CONFIDENTIAL SETTLEMENT DEED
Herbert Smith Freehilis LLP
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CONFIDENTIAL SETTLEMENT DEED
THIS SETTLEMENT DEED ismade on 10 December 2019
BETWEEN:
A
(By
(Cc)
The Claimants in the action Alan Bates and others -v- Post Office Limited (proceeding in the
High Court under Claim Numbers HO16X01238, HO17X02637 and HQ17X04248) as
described more fully in the Group Register served on 11 November 2019 and reproduced at
Schedule 1 (each a “Claimant”, and together the “Claimants”);
Post Office Limited, a company incorporated in England and Wales (registered number
02154540) whose registered office is at Finsbury Dials, 20 Finsbury Street, London,
EC2Y SAQ (the "Defendant"),
Freeths LLP, a law firm whose registered office is at 80 Mount Street, Nottingham,
Nottinghamshire, NG1 SHH (the “Claimants' Solicitors"),
each of whom is referred to In this Deed as a “Party”, or together the "Parties".
WHEREAS
a)
)
6)
@)
(8)
The Claimants have brought proceedings against the Defendant in the High Court of England
ard Wales under claim numbers HQ16X01238, HQ17X02637 and HQ17X04248 in
connection with alleged breaches by the Defendant arising out of the operation of the
Claimants’ electronic point of sale system, Horizon {the “Action"), as set out in the
Claimants’ Claims, The Defendant has counterclaimed against the Claimants.
The Action has been pursued under a Group Litigation Order made by Senior Master
Fontaine on 22 March 2017.
To facilitate the pursuit of the Action, the Claimants have entered into certain financial
arrangements with litigation funders, Therium and the Claimants’ Solicitors.
On 15 March 2019 Fraser J gave judgment on certain common issues relating to the legal
relationship between the Defendant and certain of the Claimants (the “Common Issues
Judgment’). The Defendant was refused permission to appeal the order made (the “PTA
Application”)
Fraser J is expected to give judgment on certain issues relating to the robustness and other
aspects of the Horizon System in the course of 2019 (the “Horizon issues Judgment’).
Trials dealing with questions of breach, causation and joss have not yet taken place.
Nothing in this Deed shall be construed as an admission by the Defendant of any lability or
of the validity of any of the Claimants’ Claims or of any facts or matters in relation to any Like
Claim.
Notwithstanding the above, and without any admission of lability, the Claimants and the
Defendant have agreed to settle the Claimants’ Claims and the Defendant's Counterciaims
and all Like Claims on the terms set out below.
ITIS AGREED
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DEFINITIONS AND INTERPRETATION
In this Deed, unless the context otherwise requires
“Claimants* Claims" shall mean ail and any of the claims or potential claims alleged by any
of the Claimants in the Action and arising as a result of the PTA Application (including those
made in the Generic Particulars of Claim, the Claimants’ Schedules of information, the lead
Claimants’ individual Particulars of Claim (in each case including any amendments) and/or
in any correspondence between the Parties in or relating to the facts and matters referred to
in the Action including, without limitation, claims in respect of the losses and causes of action
set out at Schedule 2. The Claimants’ Ciaims shall also include all claims for interest, costs
and expenses (including the costs of the PTA Application) and any Like Claims.
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“Claimant Steering Committee" shall mean Alan Bates and Kay Linnell
"Defendant's Counterclaims” shall mean any and all clairns or potential claims alleged by
the Defendant in its Counterclaim in the Action and/or in any correspondence between the
Parties in of relating to the facts and matters referred to in the Action including, without
limitation, claims in respect of the losses and causes of action set out at Schedule 2. The
Defendant's Counterciaims shall aiso include all claims for interest, costs and expenses end
any Like Claims.
“Effective Date" shall mean the date which is 3 Working Days from the date of this Deed.
“Support Fund” shall mean a fund to be established by the Claimant Steering Commitiee
with the funding payable by the Defendant under clause 2.1.1{C) in order fo deaf with
hardship cases.
“Like Claims” shall mean any and all actual, alleged, threatened, potential or derivative
claims, defences, actions, causes of action, lawsuits, counterclaims, set-offs, disputes.
demands, charges, liabilities, complaints and matters of whatsoever nature {including any
claims for interest, fees, expenses or costs), save for Malicious Prosecution as set out in
clause 4.2, that the Claimants or the Defendant or any of their Related Parties have or may
have against any other party to the Action or Related Party whether actual, contingent, in
relation to past, present or future losses, whether or not presently known to the Parties or
any Related Party, whether or not arising from any other change of circumstance of any sort
and whether arising out of negligent, wilful or intentional conduct or otherwise. For the
avoidance of doubt, the definition of Like Claims is subject always to Clause 4.2.
“Malicious Prosecution” means ciaims by the Convicted Claimants against the Defendant
for malicious prosecution.
“Potential Claimants” shall mean any and all persons, apart from the Claimants, who may
seek to bring any actual, alleged, threatened, potential or derivative claim, lawsuit, demand,
complaint or charge of whatsoever nature against the Defendant or its Related Parties in any
way related to the matters set out in the Amended Generic Particulars of Claim signed on 6
July 2017, the Claimants’ Schedules of Information, the lead Claimants’ Individual Particulars
of Claim and/or in correspondence in or related to the Action, including pre-action
correspondence.
“Related Parties” shall mean: any natural or corporate person who has worked in {whether
formailly or informally) or been involved in any way in the operation or management of eny
brench (or branches) of the Defendant in respect of which a Claimant has brought a claim in
the Action comprising:
fa) any company in the control of a Claimant;
tb) any relative of the Claimant (including step-relatives or relatives by marriage. but
not including cousins beyond first cousins) and
(o} any corporate or natural person who was jointly entitled to bring a claim with any
claim brought by any Claimant.
"Settled Claims” shall have the meaning given to that term in clause 4.1,
“SPM” shall mean Sub-Postmistress. Sub-Postmaster, Operator, or Postmaster of a
Network Branch of the Post Office (whether a natural or fegal person) provided that person
has entered into a contract with the Post Office.
“Working Day” shalf mean any day except a Saturday, Sunday or bank or public holiday in
England.
Any reference to this Deed includes the Schedules to it each of which forms part of this Deed
for all purposes;
A reference to an enactment, EU instrument or statutory provision shail include a reference
to any subordinate legislation made under the relevant enactment, EU instrument or statutory
provision and is a reference to that enactment, EU instrument, statutory provision or
subordinate legislation as from time to time amended, modified, incorporated or reproduced
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and to any enactment, EU instrument, statutory provision or subordinate legislation thet from
time to time (with or without modifications) re-enacts. replaces, consolidates, incorporates or
reproduces it;
& reference to a person shall include a reference to a firm, body corporate, unincorporated
association, partnership or to an individual's executors or administrators;
A reference to a clause, sub-clause, paragraph, Schedule (other than to a schedule to a
statutory provision) shall be a reference to a clause, sub-clause, paragraph, Schedule (as
the case may be} of or to this Deed:
fa period of time is specified as frorn a given day, or from the day of an act or event, It shall
be calculated exclusive of that day:
References to writing shall include any modes of reproducing words in any legible form and
shail include email except where expressly stated otherwise; and
The headings in this Deed are for convenience only and shall not affect its interpretation.
SETTLEMENT PAYMENTS
On or by the Effective Date, the Defendant shall pay:
24.4 to the Claimants’ Solicitors the aggregate sum of.
A) £9.m (nine and a half million pounds sterling) (being £15m (the “Legal
Costs”) jess the sum of £5.5m ordered to be paid in respect of the
Common Issues Judgment) in respect of legal costs and disbursements;
4B) £42m (forty-two million pounds sterling) by way of darnages, htigation
funding, ATE costs or other costs, or other relief claimed in the Action (the
“Settlement Payment’);
() £0.75 (seven hundred and fifty thousand pounds sterling) in respect of
the Support Fund {the “Support Fund Costs”);
by electronic transfer to the client account of the Claimants’ Solicitors, the details
of which are:
Address: Freeths Client Account
Sort Code: Py
AccountNo: {iy
Ret: ce
212 The Legal Costs, the Settlement Payment and the Support Fund Costs are
collectively referred to as the "Cash Settlement Sum".
The Defendant's obligation to pay the Cash Settlement Sum pursuant to this Deed shall be
discharged in full by making the transfers referred to in clause 2.1 above
Any dispule between the Claimants, the Claimants’ Solicitors, the Claimant Steering Group,
their litigation funders and/or ATE providers, as fo the distribution or apportionment of the
Cash Seitlement Sum shail have no effect on the discharge to which the Defendant is entitled
under clause 2.2 above.
NO LIABILITY
Nothing in this Deed shall be construed as an admission by the Defendant of any liability or
of the validity of any of the Claimants’ Claims or of any facts or matters in relation to any Like
Claim,
RELEASES AND COVENANTS NOT TO SUE
Save as expressly set out in clause 4.2 below, this Agreement is in full and final settlement
of the Action, the Claimants’ Claims, the Defendant's Counterclaims and any further claims
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which arise out of or are in any way connected to, whether directly or indirectly, the claims
of counterclaims made or the facis and matters alleged by ary party in the Action (the
“Settled Claims”).
The Settled Claims shail not include:
424 claims in contract between the Defendant and those Claimants who remain in post
@8 posimasters as set out in Schedule 3 which (a) arise wholly out of facts and
matters which took place after the Effective Date of this Deed, and (b) which could
not have been brought in the Action; and
4.2.2 claims against the Defendant for Malicious Prosecution.
Upon transfer by the Defendant of the Cash Settiernent Sum pursuant to clause 2:
434 the Claimants shall for themselves and for any Related Party (insofar as they are
able}
A} fully and finally settle, release, acquit and forever discharge the Defendant
from and against the Settled Claims: and
(B) covenant not to sue, pursue or proceed against the Defendant in relation
to any claim, fact or matter arising from or connected to the Settled Claims;
and
43.2 the Defendant shall, on its own behalf and on behalf of any of the Detendant’s
Related Parties:
AY fully and finally settle, release, acquit and forever discharge the Claimants
from and against the Settled Claims; and
4B) covenant not fo sue, pursue or proceed against the Claimants (or any of
therm) or their Related Parties in relation to any claim. fact or matter
connected to the Settled Claims.
The agreement set out in this Deed supersedes and overrides any and ali previous
agreements between the Parties and any previous court orders relating to the Legal Costs
and all other claims relating to other legal costs, expenses and disbursements, save to the
extent that such agreements or orders have already been satisfied.
itis acknowledged and agreed that the compromise set out in this Deed was reached by the
Parties acting in good faith and that no additional obligation to that effect shall be implied.
WARRANTIES AND INDEMNITIES
The Claimants and the Defendant warrant and represent that it has not sold, transferred,
assigned or otherwise disposed of its interest in the Settled Claims which might give rise to
separate claims.
The Claimants’ Solicitors warrant that the Claimants are legally liable to pay the Legal Costs.
Should any Party (other than the Defendant) bring any actions, claims or proceedings against
the Defendant or should the Defendant bring any such actions, claims or proceedings against
any Party in respect of or in relation to the Settled Claims (for the avoidance of doubt, save
in relation to compliance with this Deed), the Party bringing the action, claim or proceedings
shall indernnify, and shall keep indemnified, the other Party in respect of any and ail costs or
llabifities (including any and all legal costs, whether or not those costs would be recoverable
apart from the provisions of this clause) incurred in connection with the action, claim or
proceedings.
The Claimants’ Solicitors warrant that they have the authority and power to enter into this
Deed on behalf of the named Claimants in Schedule 1 and to execute the agreement on their
behalf, For the avoidance of doubt, the Claimants’ Solicitors do not warrant their authority (or
that of the Claimants) to bind any party other than the Claimants or the Ciaimants' Solicitors
to the terms of this Deed.
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The Claimants’ Solicitors represent and warrant that they have provided independent advice
to the Claimants (by so advising the Claimant Steering Committee) that they are satisfied
that the decision reached to settle on the terms of this Deed was fair and appropriate in ali
the circumstances.
TOMLIN ORDER,
As soon as is reasonably practicable after the Effective Date, the Claimants’ Solicitors shall
file the agreed Tomlin Order at Schedule 4, signed by both parties, staying all Settled Claims.
upon the terms of the schedules thereto, save for the purposes of enforcement of the terms
in Part A Confidential Schedule I.
The Defendant shall ensure that it has taken all of the steps set out in Part B of Confidential
Schedule i! of the agreed Tomlin Order at Schedule 4 before 30 January 2020.
The Cisimants shail apply to the Court to discharge the Group Litigation Order dated 22
March 2017 and discontinue all claims in these proceedings with no further order as to costs
by no later than 4pm on 31 January 2020. upon compliance by the Defendant with the
requirements in Part B of Confidential Schedule il of the agreed Tomlin Order ai Schedule 4.
CONVICTED CLAIMANTS
The Parties acknowledge that:
PAA amongst the Claimants are some individuals whe have been convicted of criminal
offences (the “Convicted Claimants") of which approximately 32 have referred
their cases to the Criminal Complaints Review Commission (the “CCRC"):
FAV the Convicted Claimants cannot proceed with their claims in the Action for
Malicious Prosecution, or with claims which would be barred by res judicata by
reason of their conviction, unless those convictions are overturned;
FA a8 part of the settlement set out in this Deed, the Defendant has not made, or
agreed to make. any payment to or for the benefit of any Convicted Claimant; and
PAA if, for reasons of expediency and to facilitate the settlement of the Action as a
whole, those Claimants who are not Convicted Claimants elect to share any part
of the Cash Settlement Sur to which they may be entitled with any Convicted
Claimant, though not giving either express or implicit approval to such @ course,
“ the Defendant acknowledges it is unable to prevent it.
Nothing in this clause 7 shall prevent the Convicted Claimants from pursuing the remedies
available to them through the civil courts in relation to claims by them for Malicious
Prosecution (but Malicious Prosecution only}, or through the CCRC and/or the criminal
appellate courts. The Defendant agrees that time will not start to run for the purpose of the
Limitation Act 1980 until any conviction is overturned.
The Defendant undertakes that.
7.3.1 it shall take advice from feading counsel at the criminal Bar as to how it should
proceed with regard to the Convicted Claimants and shall instruct him or her to
consider its obligations to the CCRC, to the Crown Prosecution Service, to the
Courts and to the public interest and administration of justice insofar as each is
relevant in any given case, in relation to the cases of the Convicted Claimanis,
7.3.2 A shall, at minimum, act upon and follow the legal advice it receives from leading
counsel,
7.33 it shall take no steps to prevent the Horizon Issues Judgment from being handed
down, and the Defendant acknowledges that the Convicted Claimants may rely
upon it should they so wish;
734 if any Convicted Claimant obtains permission to appeal, the Defendant shall take
advice from a leading criminal barrister as to what position the Defendant should
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take in relation to the appeal, having due regard to the findings by Mr Justice Fraser
in the Common Issues Judgment and in the Horizon Issues Judgment; and
7.38 in the event that any Convicted Claimant who was prosecuted by the Defendant
has his or her conviction overturned in the criminal appellate courts as a result of:
A} actions or omissions by the Defendant and
{B) findings or observations made in the Common Issues Judgment or Horizon
Issues Judgrnent
the Defendant will provide that Convicted Claimant with an apology which refiects
the basis upon which the conviction was overturned.
The terms of this clause ? are not an admission of liability or an admission of wrongdoing on
the part of the Defendant and, in particular, Royal Mail and the Crown Prosecution Service,
neither of whom are parties hereto. Nor are they evidence thal any settlement payment was
made to any Convicted Claimant in respect of their specific cases.
SUPPORT FUND
The Defendant shail pay to the Clairnants’ Solicitors the Support Fund Costs to enable the
Claimant Steering Committee to establish and administer the Support Fund to provide
financial retief and assistance in hardship cases including immediate financial hardship as
well as individuals suffering from mental health problerns (for the avoidance of doubt.
including addiction) and stress-related illnesses.
The Support Fund may be used beyond the purposes in clause 8.1 once the Claimant
Steering Committee is satisfied that its primary purpose has been served.
The Support Fund shall not be used fo fund claims against the Defendant.
Subject to clause 8.3 above, the Support Fund shail be managed and administered by the
Claimant Steering Committee in accordance with such procedures that the Claimants and
the Claimant Steering Committee shail in their sole discretion decide.
The Defendant shall have no control or oversight aver, or responsibility for or liability in
respect of, the funding, management, administration or any other aspect of the Support Fund
once its obligation to pay the Support Fund Costs has been discharged.
SERVING SPMS
The Defendant acknowledges the criticisms that have been made in the Common issues
Judgment about certain of its dealings with its postmasters.
The Defendant is comrnitted to improving its cuffure and has a new management team which
intends to make fair, just and reasonable improvements in accordance with the plan at
Schedule 5.
The Defendant agrees to meet with a group comprising 3 members of the Claimant Group
on at least a quarterly basis for no legs than the next 12 months in order to share, and obtain
feedback on its future plans for the improvement of the relationship with postmasters and
their customers and to listen to ideas which may facilitate that objective.
The Defendant shall establish an intemal group (the “Historic Shortfall Group") fo deal
with shortails which arose between 2000 and the Effective Date of this Agreement (“Historic
Shortfalis"). The purpose of the Historic Shortlall Group shall be to bring finality to all
outstanding issues in respect of Historic Shortfalls and to determine, in light of the Common
issues Judgment and the Horizon Issues Judgment (once handed down) whether such
shortfalls should be paid, repaid, written off or compromised. The Historic Shortfall Group
shall operate in accordance with the terms of reference set out at Schedule 6.
For the purpose of the mediation provision in Schedule 6, the Defendant shall establish a
cost-effective and accessible mediation scheme to the satisfaction of Charles Flint QC and
Stephen Ruttle QC.
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The Defendant shall use reasonable endeavours to resolve any outstanding issues with
serving postmnasters (including suspended postmasters) who are Claimants in the Action as
swiftly as practicable following the identification of those issues by the Claimants and/or the
Claimants’ Solicitors.
In the event of any issue, difference or dispute arising between the Defendant and a serving
Claimant, the Parties shall follow the dispute resolution procedure provided in clause 16.2
below. The Claimant Steering Committee will encourage SPMs who are not Claimants to
make use of the dispute resolution procedure.
FORMER SPM CLAIMANTS
As part of the settlernent of the Action, and notwithstanding that SPMs are agents and not
employees, the Defendant agrees to consider, in good faith, any request made by any former
SPM Claimant for a letter of reference. Any such letter which the Post Office agrees in good
faith to provide shail:
40.1.1 confirm that the Claimant was appointed as a SPM; and
10.1.2 state the duration of his or her tenure.
The SPM concerned shail be entitled, but not obliged, to share with any person seeking a
reference the Joint Press Statement (or as the case may be, any letter to be provided to a
Convicted Claimant by the Defendant).
Nothing in the above provision preciudes any Claimant from asking any individual for 4
personal reference, nor does it oblige any individual to provide a personal reference
INSOLVENCY, SECURITY AND CHARGES
in the case of those Claimants who provide documentary evidence that they are subject to
an ongoing bankruptcy or insolvency process, the Defendant agrees, without making any
admissions as to the validity of the original claim or proof, and subject to confirmation from
the relevant trustee or insolvency officeholder (the “Officeholder”) that (a) the Officeholder
agrees with the proposed course of action and (b) the Defendant shail incur no liability in
respect of any fees or costs to either the Officeholder or the Ciaimant's estate by so doing,
that it shail:
71.1.4 as soon as practicable following the provision of the name and contact details of
the Officeholder, confirm to the Officeholder that it withdraws any claim or proof of
debt in respect of unpaid shortfalls arising between 2000 and the Effective Date of
this Deed or, alternatively, (but only if it would be permissible and practical ta do
80) agree to assign the claim or proof of debt to the Claimant in question; and
agree, at the Claimant's election:
(A) to withdraw any claim or proof of debt in respect of unpaid shortfalls arising
between 2000 and the Effective Date of this Deed; or
B to sign an appropriate deed of assignrnent prepared by the Claimant in
question, to assign and so assign the claim or proof of debt to the Claimant
in question and confirm to the Officeholder that it has so assigned the claim
and give such notice of assignment required to give such assignment legal
effect:
41.4.2 a8 soon as practicable following the provision of a copy of any charge or other
security held by the Defendant and the appropriate paperwork, agree to assign to
the Claimant in question (or at his or her election, release) any security it hokis in
respect of the aforesaid claim or proof.
The provisions of Clause 11.1.1(8) or 11.1.2 shall not oblige the Defendant to take any step
unless the relevant Officehokier so agrees. Nor does it make any representation or give any
warranty a to the legal effect thereof.
In the case of those Claimants who have been or are the subject of civil proceedings by the
Defendant relating to the subject matter of the Action. and / or have charging orders made
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against them in favour of the Defendant and / or any other cash or security taken by the
Defendant in connection with those proceedings:
11.3.1 the Defendant shall take all necessary steps and cooperate in good faith with the
Claimants (or any solicitors instructed by them) to expedite the resolution of any
such proceedings on a basis consistent with the provisions of this Deed,
44.2.2 in the event that a Claimant notifies the Defendant of any steps he or she requests
that the Defendant take to bring about the discontinuance, variation, set aside,
discharge or release of any such proceedings, judgment, order or related security.
the Defendant shall respond within 14 days or as soon as is reasonably practicable,
confirming whether it consents to the request made by the Claimant, such consent
not to be unreasonably withheld
11.3.3 In the event of a dispute following a withholding of consent by the Defendant the
Claimant may elect to resolve that dispute using the dispute resolution procedure
Set out in Clause 16.2 below.
Any disputes arising out of the Parties’ compliance with Clause 11.1 and / or Clause 11.2
shall be subject to the dispute resolution procedure set out at Clause 16.2 below.
CONFIDENTIALITY
On the Effactive Date, the Parties shall jointly release the press siatement in the form set out
in Schedute 7 to this Oeed to the public (the “Joint Press Statement").
Each Party undertakes to the other that (unless the prior written consent of the other Party
shail first have been obtained) it shall, and shall procure that its officers, employees, advisers
and agents shall, keep confidential and not by failure to exercise due care or otherwise by
any act or omission disclose to any person whatever or terms of this Deed or the contents of
the discussions and negotiations which have led up to this Deed, save for the contents of the
Joint Press Statement (the “Confidential information”).
The consent referred to in clause 12.2 shall not be required for disclosure by a Party of any
Confidential Information:
12.3.1 to its officers, employees, agents, shareholders. in each case, as may be
conternplated by this Deed or fo the extent required to enable such Party to carry
‘out its obligations under this Deed, who shail in each case be made aware by such
Party of its obligations under this clause and shall be required by such Party to
observe the sare restrictions on the use of the relevant information as are
contained in this clause 12;
12.3.2 to its professional advisers {including without limitation its auditors and other
accounting advisers, financial advisers and legal advisers) who are bound to such
Party by a duty of confidence which applies to any information disclosed;
12.3.3 tothe extent required by applicable law or by the regulations of any stock exchange
or regulatory or supervisory authority to which such Party is or may become subject
to or pursuant to any order of court or other competent authority or tribunal:
42.3.4 in connection with the commencement, pursuit or defence by a Party of any legal
proceedings to which any Confidential Information is relevant;
12.3.5 by the Department of Business. Enterprise and industrial Strategy to the extent its
representatives consider such disclosure to be in the public interest:
12.3.6 to the extent that the relevant Confidential Intormation js in the public domain
otherwise than by breach of this Deed by such Party, and
12.3.7 which is disclosed to such Party by a third party who is not in breach of any
undertaking or duty as to confidentiality whether express or implied, in each case:
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fA) in the case of disclosure by the Defendant, subject to written consent from
the Claimants’ Solicitors; or
{B) in the case of disclosure by Parties other than the Defendant, subject to
written consent from the Defendant.
if a Party intends, in circumstances contemplated by clause 12.3.3 or 12.3.4, to disclose any
Confidential information such Party shall give to the other Party such notice as is practical in
the circumstances of such disclosure and shall co-operate with the other Party, having due
regard to the other Party's views, and take such steps as the other Party may reasonably
require in order to enable it to mitigate the effects of, or avoid the requirements for, any such
disclosure.
if any Party intends, in circumstances contemplated by clause 12.3.7 to disclose any
Confidential information to a third party such Party shall seek the consent for disclosure of
the relevant Party as soon as is practical in the circumstances, but not less than 3 Working
Days. The consent of the Party whose consent is being sought shall not be unreasonably
withheld.
This Deed shail not be used or referred to in any proceedings between the Parties save for
the purposes of enforcing the terms of this Deed or establishing, should 2 be contested, the
existence and/or terms of this Deed.
The Claimants, the Claimants’ Solicitors and the Claimants’ Steering Commitee agree
12.7.4 notte contradict the Joint Press Statement, and
127.2 not to make defamatory statements about the Post Office, in particular any
individuals, directors or ernployees of the Post Office.
The Defendant agrees:
12.8.1 not to contradict the Joint Press Statement; and
128.2 notio make defarnatory statements aboul the Claimants.
The Claimants’ Solicitors will send an email to all Claimants including a fair-minded
encouragement to comply with the obligation in clause 12.7 above and to give due credit to
the Defendant for now having resolved this dispute and to make any comments in a moderate
and fair-minded way.
Nothing in this clause shail prevent the Claimants’ Solicitors from informing or advising the
Claimants as to the terms and effect of this Deed or any document referred fo therein and /
or matters relating to the distribution of any settlement sums received under this Oeed.
The Parties agree that the Claimants who attended the mediation are at liberty to disclose
that they attended the mediation, that they met the CEO of the Defendant, that they gave
their accounts of what had happened tc them, and that he had listened attentively and that
they were very pleased to have had this opportunity.
CONTINUING LEGAL REPRESENTATION / FUNDING
The Claimants’ Solicitors agree:
13.1.1 to inform the Defendant of any Potential Claimants who may agree to the
Defendant being so informed, limited to those Potential Claimants of which they
are aware on the Effective Date of this Agreement,
13.1.2 not to solicit, advise, represent or fund any Potential Claimants, either directly or
indirectly;
13.1.3. not to share any information relevant to the Action that is confidential with any
Potential Claimants or any other party:
13.1.4 not to take any steps which might reasonably be expected tc encourage Patential
Claimants to bring claims based on facts similar to or arising out of those so 4s to
undermine the obligation in the Action (whether in England and Wales or in any
other jurisdiction) against the Defendant or its Related Parties, and
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13.1.5 to make the following statement, and only the following statement or words to
materially similar effect, # approached by any Potential Claimants in connection
with a possible claim based on facts similar to or arising out of those in the Action:
*fAve] acted for the Claimants in the Post Office Group Litigation
but that litigation has come to an end and 1 amAve are} not able
to advise you or represent yau in relation to any matters relaled
to the subject matter of that litigation. if you are experiencing
problems with Past Office or consider you have a claim against
Post Office we would encourage you to contact Post Office
directly at no cost to yourself, in order to be able to make use of
the Dispute Resolution Scheme which Post Office has
established to help existing SPMs. You are also tree to seek legal
advice. You can find a local solicitor via the Law Society website
of you might wish to contact the Citizens Advice Bureau who may
be able to advise you of some organisations who could assist
you."
The Claimant Steering Committee agrees:
13.2.1 to take no steps at any stage in the future to solicit or encourage any group Intigation
by Potential Claimants against the Defendant,
43.2.2 to take no steps at any stage in the future to solicit legal claims against the
Defendant; and
13.2.3 not to share any information relevant to the Action that is confidential with any
Potential Claimants.
CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999
No Party may assign the benefit of this Deed at any time and the rights contained herein are
personal to the Parties.
Save as expressly provided in this Deed, any person who is not a Party has no rights under
the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this Deed but this
does not affect any right or remedy of any person which exists or is available other than
under that Act.
Notwithstanding any other provision of this Deed, the Parties intend that their Related Parties
for any of then) shall have rights to enforce any provision of this Deed in which reference is
made to such Related Parties.
SERVICE OF NOTICES
Any notice to be served on the Defendant under this Agreernent:
45.1.1 must be in writing and addressed to the Office of the General Counsel; and
15.1.2 shall be served by post or personal delivery at the Defendant's registered address
from time to time.
Any notice to be served on any other Party shall be in writing and shall be deemed to be
effective if served by post or personal delivery at that Party's business or home address or if
it comes to the attention of the party concerned by any other means.
MISCELLANEOUS
Governing Law
This Deed and any dispute or claim arising out of or in connection with it or its subject matter,
existence, negotiation, validity, termination or enforceability (including non-contractual
disputes or claims) shall be governed by and construed in accordance with English law.
vsesessaa + 10
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Dispute Resolution
162 Save as provided for in the agreed Tomlin Order in Schedule 4 (to be sought by the Parties
under clause 6}, the Parties agree that any dispute or ciaim arising out of or in connection
with this Deed or its subject matter, existence, negotiation, validity, termination or
enforceability (including non-contractual disputes or claims) (the “Dispute”) shall be
resolved as follows, to the exclusion of any other dispute resolution procedure:
12.4
16.2.2
16.2.3
1624
16.2.5
16.2.6
16.27
Notification
The aggrieved party shail notify the other party of the Dispute in writing, providing
such reasonable detail as they are able to provide:
information
Within 14 days or as soon as is reasonably practicable, the parties shall provide
each other with any obviously relevant information relating to the dispute and any
information reasonably available that the other party may request ~ the parties shall
cooperate in identifying such relevant information:
Good Faith Meeting
Within 21 days or such longer period as may be agreed between the parties, the
parties or their representatives shail meet in good faith with a view to resolving the
Dispute amicably between them before any costs are incurred (the “Good Faith
Meeting”):
Escalation Meeting
if the Dispute is not resolved as a result of the Good Faith Meeting, either party
may within 21 days escalate the dispute to a member of the Defendant's senior
management to be nominated by the CEO or the General Counsel who will meet
with the parties to seek to resolve the Dispute (the "Escalation Meeting”):
Mediation
The parties to the Dispute shail consider whether to mediate and, if they both agree
to do so, shall seek to resolve the Dispute by mediation on such terms as they may
agree (the "Mediation”);
Small Disputes
All Disputes for sums totalling not more than £10,000 (“Smait Disputes") which
are not resolved at or as a result of the Escalation Meeting and / or Mediation, shall
be resolved by recourse to civil proceedings in the County Court pursuant to the
Smail Claims Track and shall be subject to the fee scale applicable thereto, and
the parties agree not to seek reallocation of the proceedings to the Fast Track or
Multi Track;
Larger Disputes
All Disputes other than those which are Small Disputes, which are not resolved at
‘of as a result of the Escalation Meeting and / or Mediation, shall be referred to and
finally determined by arbitration under the Arbitration Act 1996. The appointing
authority shall be Charles Flint QC and Stephen Ruttle QC, the number of
arbitrators shail be one, the seat of arbitration shall be London, England and the
language of the arbitration shall be English.
16.3 For the avoidance of doubt, any Claimant entitled to bring an individual claim for Malicious
Prosecution shall do so {whether or not they have attempted mediation to resolve such claim)
in the Courts.
sisosess9s,*
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16.4
16.5
16.6
16.7
16.8
16.9
16.10
16.44
Further Matters
This Deed and its Schedules represents the entire understanding and constitutes the whole
agreement in relation to its subject matter and supersedes any previous agreement between
ihe Parties with respect thereto and, without prejudice to the generality of the foregoing,
excludes any warranty, condition or other undertaking implied at law or by custom, usage or
course of dealing.
Each Party confirms that
16.5.1 in entering into this Deed it has not relied on any representation, warranty,
assurance, covenant, indemnity, undertaking or commitment which is not expressly
set out in this Deed; and
16.5.2 in any event, without prejudice to any liability for fraudulent misrepresentation or
fraudulent misstatement, the only rights or remedies in relation to any
representation, warranty, agsurance. covenant, indemnity, undertaking or
cornmitment given or action taken in connection with this Deed are pursuant to this
Deed, and for the avoidance of doubt and without limitation, neither party has any
other right or remedy (whether by way of a claim for contribution or otherwise) in
tort {including negligence) or for misrepresentalion (whether negligent or
otherwise, and whether made prior to, or in, this Deed).
if any provision or part of this Deed is found to be void or unenforceable, it shall be deemed
to be deleted and the remaining provisions of this Deed shall continue in full force and effect.
This Deed may be executed in any number of counterparts and by the Parties to Ht on
separate counterparts, each of which when so executed and delivered shall be an original,
but all the counterparts shall together constitute one and the same instrument.
No variation of this Deed shail be effective unless it is in writing (which for this purpose, does
not include email} signed by or on behalf of each of the Parties.
A failure of delay in exercising any right or remedy under this Deed shall not constitute a
waiver of that right or remedy. A single or partial exercise of any right or remedy shell not
prevent the further exercise of that right or remedy. A waiver of a breach of this Deed shall
not constitute a waiver of any other breach.
The Parties acknowledge that damages would not be an adequate remedy for a breach of
this Agreement and each Party is entitled to the rernedies of injunction. specific performance
and other equitable relief for a threatened or actual breach of this Deed.
Each of the Parties represents and warrants that they have the power and authority to enter
into this Deed.
IN WITNESS whereof this Deed has been entered into on the date first above written.
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SCHEDULE 2
All claims howsoever atising, whether direct or indirect, relating to actual or alleged:
14,
Shortfalis.
Loss of investment and capital losses of any type whatsoever including without limitation
losses linked to the purchase, fit-out, stocking, refit, improvement and resale of premises,
equipment and stock including those relating to the Claimants’ retai! and residential
premises and including those relating to goodwill
All claims for loss of earnings including those arising from suspensions, from failure fo give
notice, or adequate notice, and for loss of earnings post termination
Damage to reputation or stigma including loss of trade, prejudice to future employment or
business prospects, loss of credit
All personal injuries including anxiety, distress and inconvenience and disappointed
expectations
Any and all losses related to bankruptcy and all other insolvency procedures:
Claims for aggravated and exemplary damages
Claims for business interruption losses
Claims for the cost of litigation funding
Claims for restitutionary damages and/or any account of profit of other equitable remedies.
Ad other consequential losses, whether direct or indirect
All other losses which could have beer claimed in the Action
interest, costs and expenses
The Defendant's Counterclaims
Nothing in this Schedule shall be construed or taken to mean that a claim for Malicious Prosecution
has been settled or compromised in any way.
semsasosse3_ 2 23
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SCHEDULE 3
CLAIMANTS WHO REMAIN IN POST AS SPMS
I Claimant Number First name/company name I Surname
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SCHEDULE 4
DRAFT TOMLIN ORDER
THE POST OFFICE GROUP LITIGATION
Claim Nos. HQ16X01238, HQ17X02637
& HQUTX04248
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
BEFORE: The Hon. Mr Justice Fraser
BETWEEN:
ALAN BATES & OTHERS
Claimants
~and—
POST OFFICE LIMITED
Defendant
[Draft] TOMLIN ORDER
UPON the parties reaching the terms of settlement set eut in Confidential Schedule I to
this Order in compromise of claims and counterclaims in these proceedings and related
matters, save for claims referred to in paragraph 3 below
AND UPON the parties’ joint application for grant of an order in the terms set out herein
AND UPON hearing Leading Counsel for the Claimants and Leading Counsel for the
Defendant
BY CONSENT, IT IS ORDERED THAT:-
Stay of proceedings
1, Subject to paragraphs 2 to 3 of this Order, all proceedings in this action be stayed
upon the terms set out in Confidential Schedule I to this Order, save for the purposes
49789508693,.5 38
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of enforcement of those terms of settlement that are identified in Part A of
Confidential Schedule Il te this Order, for which purpose there be liberty to apply.
f Gri itigati rder ai isconti of claims
2. The Claimants shall apply to discharge the Group Litigation Order dated 22 March
2017 and discontinue all claims in these proceedings with no further order as to costs
by no later than 4pm on 31 January 2020, upon compliance with the requirements in
Part B of Confidential Schedule 11 to this Order.
alicios ution claims by Convicted Claiman
3. Neither the stay in paragraph I of this Order, nor the discontinuance provided for in
paragraph 2 of this Order, shall prejudice the right of any convicted claimant to bring
an individual claim for malicious prosecution which, for the avoidance of doubt, have
not been compromised under the terms of Confidential Schedule I te this Order.
Court file
4, Confidential Schedules I and II to this Order shall not be available on the Court File
for inspection.
Security for costs
5. The Claimants are released from any requirement under the Order for Security for
Costs dated 27 September 2018 to give or maintain security for the Defendant's costs.
6 The Defendant's application dated 16 February 2018 to add Therium Litigation
Funding IC as a party to this litigation and for security for costs pursuant to CPR
¥.25.14 is dismissed, with ne order as to costs.
Costs
7. Save as previously ordered in these proceedings, there be no further order as to
common or individual costs in these proceedings or as to any costs incurred prior to
the date of this Order.
Date:
11595088835 38
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Freeths LLP Womble Bond Dickinson (UK) LLP
West One, Floor 3 Oveana House
100 Wellington Sureet 34-49 Commercial Road
Leeds Southampton
LSE4LT SO16 1GA
Ref: JNH/1684/2113818/1/KL Ref: AP6/364065.01369
Solicitors for the Claimants Solicitors for the Defendant
1989608633_4 46
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THE POST OFFICE GROUP LITIGATION
Claim Nos. HQI6X01238,
HQU7X02637 & HOI7X04248
IN THE HIGH COURT OF JUSTICE
ZEEN’S BENCH DIVISION
Before The Hon. Mr Justice Fraser
BETWEEN:
ALAN BATES & OTHERS
Claimants
~and ~
POST OFFICE LIMITED
Defendant
CONFIDENTIAL SCHEDULE I
TO TOMLIN ORDER
Confidential Deed of Settlement between the parties dated [date]
447598085991 4“
THE POST OFFICE GROUP LITIGATION
Claim Nos. HQ16X01238,
HQ17X02637 &HOI7X04248
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Before The Hon. Mr Justice Fraser
BETWEEN:
ALAN BATES & OTHERS
Claimants
~and —
POST OFFICE LIMITED
Defendant
CONFIDENTIAL SCHEDULE I
TO TOMLIN ORDER
PART A
The following are the terms of settlement in the Confidential Deed of Settlement
which are enforceable by the Court under Paragraph 1 of this Order:
is Section 2 (Clauses 2.1 to 2.3);
2. Section 4 (Clauses 4.1 to 4,4);
3. Seetion 12 (Clauses 12.1 to 12.8); and
4. Section 13 (Clauses 13.1.2 and 13.1.3).
AVEREOSES 4 “e
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PART B
The requirements referred to in paragraph 2 of this Order are:
1, Receipt of the Cash Settlement Sum under Clause 2.1 of Confidential I to this
Order;
2. Receipt by the Claimants’ Solicitors of a letter from solicitors acting for the
Defendant confirming that Leading Counsel has been instructed in accordance with
Clause 7.3.1 of Confidential Schedule [to this Order;
3. Release of the Joint Press Statement referred to in Clause 12.1 of Confidential
Schedule [ to this Order:
4. Receipt by the Claimants’ Solicitors of confirmation that the Defendant has
established a mediation procedure for the purposes of Clause 9.5 of Confidential
Schedule I to the satisfaction of Charles Flint QC and Stephen Ruttle QC.
HISSONOES_4 4a
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cen
42.
13.
14
18.
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SCHEDULE 5
PLAN FOR IMPROVEMENTS
New On-boarding processes:
More Training ~ in addition to on-site / in-branch training opportunities, classroom training
is now available 5 days a week at 18 classroom sites across the country.
More Trainers ~ the investment in training has increased. with a tearn now comprising 18
classroom-based trainers and 40 on-site / in-branch trainers.
New Training Modules ~ new training modules have been introduced which target specific
products (e.g. ATMs and Lottery), and branch accounting and balancing.
New Business Support Managers ~ this new role has been created so that each new
SPM has a dedicated Business Support Manager available to assist them during their first
§ months of service, with the option of further support after that time if required. There are
20 Business Support Managers.
New Handover Process ~ Business Support Managers formally handover branch support
activity to dedicated Area Managers once a capability assessment has been completed,
which addresses matters including Horizon navigation, branch accounting and balancing,
and cash declarations and management.
New Branch Support model:
SPM Engagement — new channels are being explored to increase the levels of
engagement with SPMs which create opportunities to listen and share.
New Area Managers - 94 new Area Managers have been deployed to support SPMs’ day
to day activities, providing each and every SPM with a named individual allocated to their
branch, who will visit the branch through the course of the year and can be called on to
discuss matters conceming their specific branch.
New Branch Support Tools ~ a new set of tools is being developed to help SPMs with the
health of their business as a whole (i.e. not just the Post Office), including P&L, customer
experience and store design.
increased Agent Remuneration ~ a further £20m has been invested in agents’
remuneration for 2020/21, on top of the £17m p.a. increases for banking, fixed
rernuneration for community branches, Mailwork services and Mails products.
Transaction Corrections - new quality control has been implemented for clarity and
accuracy in Transaction Corrections
Transaction Correction Disputes Team ~a dedicated team hes been mobilised to help
SPMs if they do not agree with a Transaction Correction,
Tier 2 Branch Support - dedicated Case Handlers have been appointed to investigate
discrepancies if a Tier 1 call is unable to resolve the issue.
Horizon Knowledge Based Faults (KBFs, formerly known as KELs) ~ work has been
undertaken jointly with IT and Fujitsu to identify known faults from Knowledge Based
Articles (KBAs) and Knowledge Based Information (KBI).
KBF Process ~ a new process has been formalised which the Branch Support, Loss
Prevention and Area Manager teams can use to help identify faults wnen a SPM reports a
discrepancy.
Branch Insight Tool — operational performance information is now available to all Area
Managers and Branch Support teams to facilitate supportive discussions with SPMs
around operational activity.
14789608699,4 a“
6
47,
18
19.
20.
24
22,
23.
24
25.
New approach to Branch Losses:
End-to-end process review ~ we have re-baselined all processes relating to branch
losses including changes to discrepancy letters, options to dispute discrepancies and
discontinuance of practice of automatically deducting from remuneration.
New Loss Prevention Function ~ a new business function has been established which is
dedicated to mitigating risks of branch losses.
Loss Prevention Case Workers ~ a new team has been mobilised to administer the end-
to-end audit process and maintain clear, consolidated and consistent information tor each
individual case.
Audit Attendance - all audits are now altended by a minimum of two auditors to promote
consistency and accuracy.
Audit Rationale Document ~ a new docurnent explaining why an audit has been
scheduled is now shared with the branch operator at the start of an audit.
Telephone Quality Assurance ~ a new process has been implemented to receive post-
audit feedback from branches
Revised case management process - new processes have been introduced to improve
speed of resolution for suspension cases.
Contract management restructure ~ teams have been restructured to improve decision-
making speed and consistency in suspension, termination and reinstatement cases.
Loss Recovery Call Monitoring - telephone calls are now being monitored for quality and
consistency.
Retail Crime Support ~ increased support is being provided to SPMs to promote security
compliance and reduce retail crime risks.
a e9s089504 4s
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SCHEDULE 6
TERMS OF REFERENCE
The following shail be the key terms of reference of the Historic Shortfall Group which may be
supplemented and/or amended by written and courtersigned agreement between the parties:
1. Post Office shall establish a group led by the Post Office General Counsel and/or a senior
manager to deal with any issues in respect of shortfalls which arose between 2000 and the
Effective Date of this Agreement (the “Historic Shortfall Group”),
2. The purpose of the Historic Shortfall Group shall be to set up a scheme (the “Historic
Shortfall Group Scheme”) to bring finality to SPMs in respect of ail outstanding issues in
respect of shortfalls incurred between 1 January 2000 and the Effective Date of this
Agreement ("Historic Shortfalls") and to determine, in light of the Common Issues
Judgment and the Horizon issues Judgrnent (once handed down) whether such shortfalls
should be paid, repaid or written off,
3, Notification: Within 3 months of the communication to SPMs of the Historic Shortfall
Group Scheme, any person wishing to apply to join thet scheme (the “Applicant”) shall
notify Post Office in writing of any outstanding issues in respect of historic shortfalls setting
out the basis for the application with sufficient evidence. This should be addressed to the
Office of the General Counsel and may be sent by post or personal delivery to Finsbury
Dials, 20 Finsbury Street, London, EC2Y 9AQ;
4. information: Within 14 days or as soon as is reasonably practicable, the parties shalt
provide each other with any obviously relevant information relating to the dispute and any
information reasonably available that the other party may request ~ the parties shall
cooperate in identifying such relevant information;
8. Evaluation and investigation: The Historic Shortfall Group shall evaluate and investigate
each case and establish a mechanism for the provision of further information if required,
6. HSG Good Faith Meeting: As soon as is practicable the Historic Shortfall Group shall
meet with the Applicant and endeavour to resolve in good faith all issues regarding any
‘outstanding shortfalls in good faith and in a manner that takes into account the legitimate
interests of Post Office and the Applicant (the "HSG Good Faith Meeting”);
7 HSG Escalation Meeting: If the dispute is not resolved as a result of the HSG Good Faith
Meeting, either party may within 21 days escalate the dispute to a member of the
Defendant's senior management to be nominated by the CEO or the General Counsel who
will meet with the parties to seek to resolve the dispute (the "HSG Escalation Meeting"):
8 Mediation: If the dispute is not resolved as a result of the HSG Escalation Meeting, the
parties agree io seek fo resolve the dispute under the cost-effective and accessible
mediation scheme as established by the Defendant:
9. HSG Small Disputes: All Disputes for sums totalling not more than £10,000 which are not
resolved at or as a result of the Mediation, shall be resolved by recourse to civil
proceedings in the County Court pursuant to the Smail Claims Track and shall be subject
to the fee scale applicable thereto and the parties agree not to seek reallocation of the
proceedings to the Fast Track or the Multi Track;
10. HSG Larger Disputes: All Disputes for sums tolalling in excess of £10,000 which are not
resolved at or as a result of the Mediation, shall be referred to and finally determined by
arbitration under the Arbitration Act 1996. The appointing authority shall be Charles Flint
QC and Stephen Ruttie QC, the number of arbitrators shall be one, the seat of arbitration
Shall be London, England and the language of the arbitration shalt be English.
‘US@BOS5I9_1 8
SCHEDULE 7
JOINT PRESS STATEMENT
The Parties to the Group Litigation in Bates v Post Office are pleased fo report that they have
reached a comprehensive resolution to their long-running litigation in the High Court, following
several days of respectful, challenging, and ultimately successful mediation during which the
parties engaged with each other in good faith.
The Post Office would like to express its gratitude to claimants, and particularly those who attended
the mediation in person to share their experiences with us, for holding us to account in
circumstances where, in the past, we have fallen short and we apologise to those affected,
The Post Office is commitied to applying the lessons it has learnt. Its new Chief Executive Officer,
who joined in September and led this drive to a mediated resolution, is undertaking an ambitious
and sustained programme of changes to the Post Office's relationship with postmasters whose role
we recognise as being core to our future success. We look forward to working in genuine
partnership with postmasters to seize the opportunities ahead of us and to continue to serve
communities across the country,
Post Office Chairman, Tim Parker, said:
“We are grateful to the claimants for taking part in this mediation and agreeing a settlement,
bringing the Group Litigation to a close. I am grateful to Nick Read for his important engagement in
the mediation process. We accept that. in the past, we got things wrong in our dealings with a
number of postmasters and we look forward to moving ahead now, with our new CEO currently
leading a major overhaul of our engagement and refationship with posimasters.”
Nick Read commented:
“tam very pleased we have been able to find a resolution to this longstanding dispute. Our
business needs to take on board some imponant jessons about the way we work with postmasters,
and I am determined that it will do so.
We are committed to a reset in aur relationship with postmasters, placing them alongside our
customers af the centre of our business. As we agree to close this difficult chapter, we look forward
fo continuing the hard work ahead of us in shaping a modem and dynamic Post Oifice, serving
customers in a genuine commercial partnership with pastmasters, for the benefit of communities
across the UK."
Alan Bates commented:
“The Steering Committee would like to thank Nick Read, the new CEO of Post Office, for his
leadership, engagement and determination in helping to reach a settlement of this long cunning
dispute, During the mediation, it became clear that he intends fo reset the reiationship between the
Post Office and its Subpostmasters and put in place new processes and support for them, as part
of a wider programme of improvements.
it would seem that from the positive discussions with Post Office's new CEO, Nick Read, that there
is @ genuine desire to move an from these legacy issues and jeam lessons from the past.”
1 VBASORSSS_4 ar
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