Working Group for the Initial Complaint Review and Case Mediation Scheme
17 October 2014
MATRIX CHAMBERS
Attendees
Sir Anthony Hooper (Chair)
Alan Bates (JFSA)
Kay Linnell (JFSA)
Ron Warmington (Second Sight)
lan Henderson (Second Sight)
Chris Holyoak (Second Sight)
Chris Aujard (Post Office)
Belinda Crowe (Post Office)
Angela Van Den Bogerd (Post Office)
Tom Wechsler (Post Office)
Andy Parsons (Bond Dickinson)
Agenda
1. Minutes of 16 September meeting
2. M061 & M149 eligibility
3. Information Security
4. Standing case agenda:
4.1 Priority cases
4.2 Bankruptcy cases
MINUTE
4.3 Post Office investigation progress
4.4 Second Sight review progress
4.5 Cases Second Sight have reported on (except those listed under agenda item 5)
4.6 Queries from applicants/advisors (Letter from Philip de Nahlik)
47 AOB
5. Cases for decision:
a. Second Sight do not recommend mediation:
M017
b. Second Sight recommend mediation:
Moo1
M003
Moos
M021
M029
M035
M052
M062
Mo6s,
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1. Minutes of 16 September Meeting
The minutes of the last meeting were agreed subject to the following changes:
e Page 5 — Reference to M057 to be corrected to M076;
* Page 6 - The final sentence and action under item 4 should be deleted; and
* Page 8 — para 2 — the minutes be amended to reflect that Second Sight did not
recognise Post Office’s description of the assurances given on productivity on 11
September.
Referring to page 6, item 5 Second Sight had written to Post Office with questions on the
suspense account but had yet to receive a response. The Chair noted the complexity of the
questions. He asked if there was a surplus in the account would it be taken into Post Office
income. Post Office confirmed that it would after 3 years. Post Office and Second Sight
agreed to clarify Second Sight’s precise needs for information.
Action: The Chair asked Post Office for figures taken into income from the suspense
account to be broken down by year.
Action: Second Sight and Post Office to discuss and agree what additional
information Second Sight need relating to the suspense account.
2. M061 and M149 Eligibility
Further to the Working Group’s earlier decisions on eligibility and the Chair's subsequent
letters, correspondence had been received from the applicant's husband and their
representative in case M061; and the applicant's Member of Parliament in case M149
making representations for the cases to continue through the Scheme. It was agreed that
the neither case met the eligibility criteria set out for the Scheme, specifically that they were
not “current or former Subpostmasters” nor “counter clerks employed by the Post Office”.
The following points were made in discussion:
¢ Post Office could decide to make an exception for these cases given the time that
had elapsed and allow them to proceed;
e although possible to make an exception, a decision to allow the cases to proceed
could place the Post Office in a difficult position with applicants who had been
previously identified as ineligible for the Scheme and those who had not applied
having understood the eligibility criteria at the outset of the Scheme;
¢ applicants may have incurred significant cost in producing an application and this
should be taken into account when deciding whether to allow the cases to proceed
within the Scheme;
* Post Office had already offered to investigate each case thoroughly through
“business as usual” processes and was prepared to consider a response to any
significant financial outlay in producing a case by either of the two applicants in
question; and
* Post Office had stated in its correspondence that it would “continue” its investigation
in case M149. This should have said “would carry out” or similar as the investigation
had not commenced.
Action: The Chair asked for a letter to be sent to the applicant (cc’ed their advisor) in
M061 setting out that the Working Group confirmed that the case was not eligible for
the Scheme but that the Working Group would be keen to hear how much had been
expended in making the claim.
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Action: The Chair asked for a letter to be sent to the applicant (cc’ed their MP) in
M149.
3. Information Security
Belinda Crowe said that it was timely to remind the Working Group of the protocols on
information security. There was a lot of information on Huddle, much of it sensitive. Key
points to remember were:
¢ if any information is downloaded to any device it should be deleted in full as soon as
it is no longer required;
* personal data should only be emailed in exceptional circumstances and password
protected; and
« the Secretariat would be removing information and data from Huddle where the
Working Group has concluded its consideration of the case.
JFSA asked whether papers and the workings of the Working Group were subject to the
Freedom of Information Act. The Secretariat said that the Working Group itself was not but
papers held by Post Office about the Working Group were subject to the Fol Act.
Action: Post Office to explore whether there were protocols and deletion software that
could be shared with the Working Group for Windows and Apple devices.
Standing Agenda
4.1. Priority cases
Case No. I Status
Mos2 Final report originally received 18 September, revised version received 23
September. Awaiting mediation decision. (see agenda item 5b)
M073 Draft report received 24 September. Deadline for comments extended for
applicant until 17 October.
M086 Investigation has been prioritised - PO report due by 17 November.
M119 Investigation has been prioritised — PO report due by 24 November.
4.2 Bankruptcy cases
Case No. I Status
Mo04 SS Final report received 18 September. Awaiting mediation decision. (see
agenda item 5b)
M029 SS Final report received 18 September. Awaiting mediation decision. (see
agenda item 5b)
M032 Passed to SS 28 August, Draft CRR submitted 16 October.
M036 Passed to SS 11 September. Draft CRR due 14 November.
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Case No. I Status
Mo69 PO investigation on-going, report due by 10 November.
M081 PO investigation on-going, report due by 8 December.
Mos PO investigation on-going, report due by 10 November.
M100 PO investigation on-going, report due by 20 October.
M118 Passed to SS 16 October. Draft CRR due 28 November.
M122 Passed to SS 01 October. Draft CRR due 05 December.
M128 PO investigation on-going, report due by 22 December
M150 PO investigation on-going, report due by 8 December.
4.3 Post Office Investigation Progress
i) Overdue cases
No cases overdue
4.4 Cases with Second Sight to review Post Office Investigation Reports
i) New scheduling to note
Case No. Date passed to SS SS planned scheduled delivery date
M025 03 October 07 November
M038 13 October 28 November
M027 13 October 28 November
M108 16 October 12 December
M118 16 October 28 November
ii) Overdue cases
No cases overdue
4.5 Cases that Second Sight have reported on
Case SS draft Deadline for SS final report oe Sent to
No. report issued comments completed / due WG decision CEDR
04 September 18 September (see agenda .
Moot I 17 July 2014 2014 2014 item 5b)
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Moo3 11 September 19 September 23 September (see agenda
2014 2014 2014 item 5b)
25 September (see agenda
Moos 2014 07 October 2014 I 14 October 2014 item 5b)
moo7 I 26 September I 55 October 2014 I 30 October 2014 :
07 October 2014
mors I 26 September I +3 October 2014 I 20 October 2014 :
(Applicant)
07 October 2014
mors I 26 September I +7 October 2014 I 24 October 2014 -
(Applicant)
15 September I 25 September (see agenda
M017 2014 2014 05 October 2014 item 5a)
ois I 1° September 10 October 2014 I 17 October 2014 -
25 September (see agenda
M021 I 15 September 3014 05 October 2014 item 5b)
Mo29 27 August 10 September 18 September (see agenda
2014 2014 2014 item 5b)
M035 11 August 04 September 21 September (see agenda
2014 2014 2014 item 5b)
14 September
2014
27 August 05 September (see agenda
M039 Handed back to
2014 2014 SS for a revised item 5b)
report due TBC
14 October
M042 2014 TBC TBC -
mosg I sejoper 23 October 2014 I 30 October 2014 -
18 September
os2 I 28 July2014 I 0 September Revised version I (S22 agenda
2014 uploaded 23 item 5b)
September
moss I TO9clober I 24 October 2014 I 28 October 2014 -
moss I %OclEr I 44 October 2014 I 21 October 2014 -
31 July 2014
Revised version I (see agenda
M062 I 20 June 2014 22 July 2014 uploaded 23 item 5b)
September
moss I 8 OCPEr I 47 October 2014 I 24 October 2014 :
23 September (see agenda
MO65 2014 02 October 2014 I 08 October 2014 item 5b)
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mo72 I 8 Sctober 47 October 2014 I 24 October 2014 - -
03 October 2014
mors I 24 September I 47 October 2014 I 24 October 2014 - -
(Applicant)
more I ‘4 Cctober I 23 October 2014 I 30 October 2074 - -
moor I 10. Oclober I 95 October 2014 I 30 October 2074 - -
05 October
M115 get TBC TBC - -
mite I 1 October 2 October 2014 I 30 October 2014 - -
mize I 8 October I 44 October 2014 I 21 October 2014 - -
Belinda Crowe said that the Secretariat had been trying to make contact with 2 applicants
without success. In the case of M042, it was believed that the applicant was away from
home. In the case of M115, the applicant had moved home and not left contact details with
the Secretariat, their advisor nor JFSA. The Secretariat would continue efforts to make
contact with both applicants. The Working Group agreed that no correspondence should be
sent to either applicant until confirmation of their contact details and availability had been
received.
The Chair asked for future Working Group agendas to contain a list of:
* cases sent to CEDR; and
e those where either party has declined to mediate.
Action: Secretariat to add the requested lists to future Working Group agendas.
4.6 Any other queries raised by Applicants / Advisors
The Working Group had received an email from Philip de Nahlik asking for an extension to
the period for comments on the draft CRR in case M063. This was agreed.
Action: Secretariat to respond to Philip de Nahlik granting the extension as requested.
Philip de Nahlik had also written to the Chair asking him to recommend an increase in
payments to advisors from the £1500 offered by Post Office. It had always been clear that
the Post Office was offering a contribution towards the funding of advisors rather than
covering costs in full. The request was rejected.
Action: The Chair asked for a letter to be sent to Philip de Nahlik rejecting his request
and restating the position on funding.
4.7 AOB
JFSA asked if it was possible to receive Working Group Papers and the Agenda earlier than
a day before the meeting. The Secretariat confirmed that it would be possible for some
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papers but others were circulated at the time they were in order to reflect the most up to date
position e.g. the case tracker.
Action: Working Group agenda and papers to be circulated as soon as is practicable
to Working Group members.
The next Working Group meeting was set for 14 November 2014.
Action: Secretariat to send diary scheduler to Working Group Members. Working
Group telephone call of 13 November to be cancelled.
5. Cases for Decision
5.a. Second Sight do not recommend mediation
JFSA said that they were insufficiently prepared to discuss case M017 as they had had
insufficient time to consider the papers. They asked for 14 days to consider the papers
relating to any case where mediation is not recommended.
Action: Case M017 to be discussed on Working Group telephone call of 30 October
2014.
5.b. Second Sight recommend mediation
At this point JFSA left the meeting as, having cast their vote in favour of mediation in all
cases, they did not wish to be present for any further discussion.
Prior to commencing discussion of the cases with remaining the members of the Working
Group, the Chair asked who would be the beneficiary of any incorrect transaction, assuming
there was no theft. This was most likely to be customers although it was possible for Post
Office clients to benefit from incorrect transactions. However, each case was different and
be seen on its own merits.
The Chair asked Post Office whether subpostmasters who have not entered the Scheme
have, over the years, complained about unexplained discrepancies. He felt this was
particularly important to address given the their statements in paragraph 3.17 of their
response to Second Sight’s draft Part Two report, expressing confidence that there were no
systemic problems with branch accounting on Horizon. Post Office said that paragraph 3.17
was not intended to suggest that there had been no other complaints about unexplained
discrepancies and they could not say whether there had or had not been such complaints.
However, just as with cases within the Scheme, investigations into complaints through the
normal business processes had not identified any issues with the Horizon System.
The following points were made in discussion:
e all transactions and data on Horizon were fully auditable; and
«there was a need to identify what happens in a practical sense where, for example, a
customer pays a £100 utility bill using a credit card, the credit card is debited but the
transaction is not shown as completed on Horizon; and the differences in this
example between the old Horizon environment and new Horizon environment.
It was agreed that there was a need to:
« identify if there were any cases where a subpostmaster had been left with a shortfall
having made no errors;
« set out 5-6 worked examples where Second Sight can identify a potential cause of
loss in branch and Post Office the potential mitigation;
¢ set out how often Post Office absorbs losses from Crown Offices and the level of
tolerance in such errors before an investigation is commenced; and for
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« Second Sight’s part two report to reach a definitive view on these issues to the
satisfaction of all members of the Working Group and the Scheme’s Stakeholders (as
far as possible).
Action: Second Sight to identify if there were any cases where a subpostmaster had
been left with a shortfall having made no errors and set out 5-6 worked examples
identifying potential cause of loss in branch for Post Office’s response.
Action: Post Office to set out how losses from Crown Offices are absorbed and the
level of tolerance in such errors before an investigation is commenced.
Action: Second Sight to prioritise their investigation of issues currently unresolved in
their part two report.
M001
The Chair summarised the case in the Second Sight Review and the Post Office
Investigation Report. In discussion the following points were made:
e the High Court had ruled that the applicant was responsible for the losses in branch,
based in part on the testimony of new staff members who had reported no issues
with Horizon after taking up post;
« the general reference in paragraph 5.11 of the CRR to Second Sight’s part two report
to ongoing investigations to a wide range of made it very difficult to determine
whether mediation was appropriate in this case or not;
e the list of issues at paragraph 5.10 covered a range of issues many of which were at
a different stage of investigation;
* amore appropriate recommendation may be to revisit this case when Second Sight’s
investigations into the issues identified in their part two report was complete. If it was
not possible to identify the causes of losses other than counter-error it may be that
mediation cannot be recommended.
Action: Second Sight to rewrite the CRR:
e identifying causes of loss other than counter-error if they exist; and
* expanding on paragraph 1.15 covering the views expressed in the High Court
Judgement and any new evidence that has come to light since the judgement.
Action: Secretariat to:
« reschedule consideration of the case when actions above completed; and
¢ at that time include a copy of the High Court Judgement in the Working Group
papers.
M005
The Working Group agreed, after a brief discussion that this case was similar to M001 in that
the issues remaining under investigation in Second Sight’s part two report needed to be
resolved prior to a decision being made on mediation. However, in this case there remained
a possibility that this case may be resolved outside the Scheme in a discussion between
Post Office and the applicant.
Action: Post Office to explore whether the case may be resolved outside the Scheme
in a discussion with the applicant.
Action: Secretariat to reschedule consideration of the case when issues under
Second Sight’s part two report remaining under investigation are resolved.
M003 and M021
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The Post Office asked for cases M003 and M021 to be discussed together as they covered
the same events. The applicant in M003 was technically ineligible but the Working Group
had decided at a previous meeting exceptionally to allow the case to proceed given the link
to the subpostmaster’s case - M021. The Chair summarised the case in the Second Sight
Review and the Post Office Investigation Report.
In discussion the following points were made:
«it was almost certainly impossible to identify the cause of loss in branch owing to the
false accounting by the applicant (M003);
« declaring the correct cash amounts leads to a much stronger investigation and
preventative case in almost all (if not all) circumstances, and will generally lead to the
cause of losses being identified;
« the applicant (M003) had asked for additional training in June 1999. It was not clear
that Post Office had responded adequately to this request. However, losses were
not incurred in branch until 2007-08;
* as with earlier cases, broad references to issues with hardware remained unresolved
making it very difficult to determine whether mediation was appropriate in this case or
not;
e the evidence used in M021 was the same as that in M003; and
eit was noted that the applicant in M021 remained a serving subpostmaster with whom
the Post Office had an ongoing business relationship.
Action: Second Sight to rewrite both CRRs to take account of time elapsed between
request for training and losses incurred in branch.
Action: Secretariat to reschedule consideration of the cases when issues under
Second Sight’s part two report remaining under investigation are resolved.
M052
The Chair summarised the case in the Second Sight Review and the Post Office
Investigation Report. Within that, the applicant had been convicted of 11 counts of theft. The
Chair asked Second Sight if anything within their investigations had cast doubt on the safety
of those convictions. Second Sight said that they had not seen the full paperwork relating to
the prosecution.
Action: Post Office to share prosecution case statements with Second Sight where
they have not already done so.
The Chair closed the meeting owing to time constraints.
Action: The Chair asked the Secretariat to seek to identify a date in the next 10 days
to continue discussion of cases scheduled for discussion.