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GLO CONTINGENCY PLANNING GOVERNANCE
Finsbury Dials / Telephone Conference
15 August 2019 ; 16:00pm
Attendees: Ben Foat (BF), Andy Parsons (AP), Alan Watts (AW), Rodric Williams (RW), Belinda Fox (BF1), Amy
Prime (AP1), Angela Van-Den-Bogerd (AVDB), Stuart Nesbit (SN), Melanie Corfield (MC), Catherine Hamilton (CH),
Mark Underwood (MU), Julie Thomas (JT), Aimee Daughters (AD), Nick Beal (NB), Zoe Brauer (ZB), and Kate
Emanuel (KE)
Apologies: Amanda Jones (AJ), Kirsten Massey (KM), Patrick Bourke (PB)
Agenda
Update from 30.07.19 Board Meeting
Further Issues Trial
Approach to Criminal Cases
Update on Settlement
Costs Update
POLSAP — Fujistu Data Centre Exercise
AOB
NJola)alwlnIe
1 Update from 30.07.19 Board Meeting
¢ The Board have requested more information around the financial implications involved with any
potential settlement. They has asked for settlement ranges, where this money might come from
and the potential internal governance. The next board is 24 September. See Action 1.
© HSF are producing this, currently working on categorising the claimants and the claims by
reference to established legal principles and verifying them against Post Office’s records.
e Losses fall into three categories: 1. Loss of Earnings (including loss of remuneration, post-
termination losses) 2. Shortfalls 3. Personal injury/stigma damage.
¢ Different claimant types include: those with criminal convictions, those who settled through the
mediation scheme and those who were declared bankruptcy.
¢ The Board also requested a better understanding around mediation and the mediator chosen.
This is to assure the Board that the right people are involved and have a good understanding as
to how those chosen mediator has approached previous mediations.
© SN-—will the piece on cost implications include any ongoing BAU costs that will arise from a
potential settlement?
* RW-at this stage the overall approach to settlement is the first piece, second piece of work is
how that will impact the rest of the business/BAU etc and what exposure there might be. Agent
debt figures haven’t been included at this point.
e JT-the impact of opex on operations has been considered and an increased cost run rate has
been estimated but this is separate to the GLO paper. Retrospective claims and write off are
separate, dependant on group litigation GLO paper. As it stands former agent debt are
reclaiming more than current agent debt.
« AP=settlement is to be done without admission of liability and we will have to work out the
impact of this, won’t necessarily need numbers to work out impact on behaviours. Will need to
be aware of this going into negotiations.
¢ Emphasised that if we do settle, we lose the right to appeal the Common Issues Judgment.
2 Further Issues Trial
Directions and Governance through to Trial end FY 19/20
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«There is now a Court Timetable through to March 2020
¢ Propose that SteerCo meetings are kept every fortnight, all agreed.
¢ Monthly Board SubCommittee meetings are scheduled to be held shortly ahead of each Board
meetings, all agreed.
e August — focus is on disclosure.
© September — court proceedings are relatively quiet.
October — focus on cost budgeting and pleadings.
¢ November — focus on responding to pleadings with defences.
¢ — Still awaiting court decisions — Horizon Judgement and Common Issues Appeal decision. J.Fraser
has said Horizon Judgement will be ‘definitely by December’.
¢ Reminder that the Teams Site is updated with all relevant records of minutes, dates and papers.
Approach to Further Issues Trial
e There is expectation that the Claimants will try to run the Further Issues Trial on sympathy rather
than the legal implications, which leaves us with one of two options:
1. Stick with the scope we have — very fact light, stick to the proposed scope of the trial; or
2. Be prepared to respond to any facts that are put forward by the claimants by carrying out
further deep dive work. This is strictly speaking out of scope but it means we will be
prepared for a sympathy attack.
Post Office won't receive the pleadings until October and by then it won’t leave us with enough
time to complete due to the depth of the analysis.
There is only so much the work can be split over multiple resource, as need coherent forensic
knowledge of each case. It’s not just work for the lawyers, analysis will also be accountancy and
IT based.
© = BF-what’s the likelihood of claimants going out of scope?
* AP- more than likely to happen
¢ ADVB-from a witness perspective, when this happened during the Horizon Trial we hadn’t done
the deep dive and therefore couldn’t respond. If the factual work is completed, from an optics
perspective we will be able to respond if it happens again.
© RW-~a better understanding of the claimants, given a potential mediation isn’t wasted work if
the claimants do go out of scope. We have received challenges about knowledge of the
claimants, this will go some way to remedying this.
¢ BF-Given the adverse implications for witnesses, further investigation of claimants would be
advantageous for knowledge purposes, shareholder has consistently challenged us for greater
understanding and the extra cost compared to the overall litigation is minimal. Decision made to
to undertake the exercise.
* JT-completely agree. What is the split of the information between work that legal need to
complete and the work the business need to complete?
« AP —challenge will be in the older cases where false accounting was admitted and full
investigation wasn’t given, we are having to retrospectively review the cases from scratch. This
will include forensic review of data (Post Office team), identifying key people who interacted
with them (lawyers, interviewing POL staff) and IT analysis (Fujitsu).
e WBD are providing a detailed work plan and a costs plan, provide further detail. See Action 2.
Update on Disclosure
The current position is that we are good to respond with what has been ordered, however to
show willingness we are attempting to see whether we can go further to respond to some of
their extra inquiries and respond positively.
There are many further documents that we don’t have. We are not required to do an exhaustive
search, only what is reasonable. Request to SteerCo on any further avenues of inquiry that could
be made.
e Particular issue with Royal Mail held documents, as this would involve third party extraction.
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* AP—can you look at the scheduled information of where we are missing information, look at
this.
© AP to send a further email around, reminding to look at this schedule. See Action 3.
e JT-—The team drives that Royal Mail managed for this, did we lose access to these or did set up
new ones and take the information with us.
¢ CH-lIn the split, we would have wanted to make sure everything relevant should have been
transferred over. Catherine to investigate through some alternative routes. See Action 4,
* General concern with some of the statements that don’t feel accurate.
* ADVB—NBSC ~a lot of work was done post separation on knowledge articles, everything prior to
that was stored on Remedy — is this archived, is there anything we can do to extract this
information.
e AP has noted the concern over particular statements and is to follow up and verify some
information.
Counsel Availability
Holding diaries of all Counsel as far as possible, but still don’t have 100% clear coverage.
e Just for noting at this time as too premature for any decisions to be made.
© The 4" December CMC is worrying, and particular nervousness around the June/July period.
¢ This is a matter for HSF and the next Board SubCo.
¢ The preparation work for an appeal is a lot light than a full high court trial, one would hope that
Helen may have availability around that time.
There is the opportunity that if appeal is allowed we can front load the preparation.
3 Approach to Criminal Cases
= The criminal cases cut across a lot of issues: the trial, the mediation/settlement, also Post Office
has a positive duty that if material comes to light it ought to have been disclosed to claimants
before they pled guilty/took part in their trial.
e Understanding those with criminal convictions is important, as they are a cohort of claimants
that could have a significant negative impact on the reputation of Post Office.
e A lot of what needs to be done is dependent on what will arise from the Horizon Judgment, but
there concern is if we do nothing until Horizon Judgment lands, we will then be faced with a very
busy period with a slower reaction time.
¢ Proposal is to review a sample of the criminal cases, identify the common themes of those cases
and develop a list of questions for the criminal lawyers.
* Where somebody has accepted they are guilty for false accounting but put forward an excuse -
duress etc, confused by the system, I was told do that; we want to understand how much of
criminal law is available to those defendants.
¢ To the extent that the convictions stand, this is of significance in the civil litigation. It shows that
Post Office was right to terminate those contracts.
e¢ BF-entirely sensible to do this, BoardSubCo have repeatedly asked how we are approaching the
criminal cases. Question asked whether Cartwright King are the right firm for this work?
* RW-~at the moment they are the right resource as providing information they already have. For
the bigger strategic advice we have looked to Brian Altman QC before to avoid Cartwright King
marking their own work so to speak.
¢ Appropriate people to take this question away and think about the criminal resource considering
the particular sensitivities. We will have to provide assurance to the Board and shareholder that
the best team are in place.
¢ _HSF to put together a work plan and costs document. See Action 6.
4 Settlement
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HSF and WBD have discussed whether it is appropriate to chase again. Agreed that there is a
point where we don’t want to seem desperate.
If AP has to contact Freeths will mention the letter as a side note.
No further material updates.
5 Datacentre Disaster Recovery Exercise - POLSAP
A shut down of the system has not been carried out since 2013 and is currently the biggest IT
risk in the register
A copy of POLSAP has bene places into Accenture, however as there were areas that there
couldn’t be 100% confirmation everything had been copied over the original was also kept.
The original is still there, running cold. The Disaster Recovery System involves shutting down the
original and booting it back up again.
The recommendation is the most risk averse, nothing is being done with the system, it will just
stay closed down.
Risk is then when it is booted back up, it won’t do so correctly or will do so with some data loss.
Given it is an old system, there is no contractual vendor support only a best endeavours
agreement.
BF — balancing out the risk of never having completed a disaster recovery exercise against risk of
not recovering data. Best opportunity to do this is the August bank holiday.
ADVB — raised a particular concern given precious data loss that wasn’t identified until the data
was required and people started looking for it.
CH — this scenario is different to the one in which you previously lost data. This plan is as good as
it can be and has been scrutinised by the appropriate SMES.
BF — key mitigation is that we have a shadow image of the POLSAP to rely on should the unlikely
event be the system doesn’t reboot. Agreement in principle to proceed subject to comfort for
Angela that we can identify if any information is lost immediately after the event.
Once the disaster recovery has been done, can we have a report to show what has been
completed. A verbal update to be brought to the next SteerCo.
6 AOB
Board Paper in September/October/November
Meeting with new CEO
Meeting with Shareholder (Richard Watson UKGI)
Expect a board paper for each board, can we map into in to diaries deadlines etc.
MU to provide paper deadlines and AD to update the calendar in Teams.
Scope of paper/number of paper depends on what is going on in the legal workstream, to
remain flexible at the moment.
One definite for the September board is the scope of settlement paper.
BF has updated new CEO on the GLO. He has handled big piece of litigation before, very keen to
understand what the strategy is and the pathway.
This is a material matter on his remit and he will be joining the Board SubCo.
To the extent following settlement analysis, anything that will be necessary under articles to
obtain consent of Government, UKGI have requested legal advice from HSF on liability and the
legal basis of this payment. To include why it would be rational and reasonable to make such a
payment.
AW - the question is what is this higher number, what authority from shareholder do we need
and how do we obtain authority whilst ensuring there is no leak of a number.
Ideally, it will be a figure that doesn’t invoke the necessary shareholder authority.
NB — will the claimants have to pay tax on any settlement figure?
Minutes of Meeting
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« AP-—very dependent on the wording of the settlement, what payments are being made for etc.
Actions
No Description Owner Status
1 Paper on settlement for the Board HSF
2 Work Plan and Costs document for further claimant review WBD
3 Re-circulate disclosure paper and prompt for further feedback WBD.
4 Investigate further avenues for obtaining historic data CH
5 Follow up and verify statements of concern in disclosure paper WBD (AP)
6 Work Plan and Costs document for review of Criminal Cases HSF
7 _ I Update Teams calendar with Board paper deadlines AD
Author of Minutes: AD
Date: 15 August 2019