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Message
From: Patrick Bourke
Sent: :
To: Rodric Williams
f drew Parsons
7 } Melanie Corfield
Subject: Re: POSTMASTER LITIGATION - DRAFT WORDING FOR THE ARA - CONFIDENTIAL AND SUBJECT TO LEGAL PRIVILEGE
Hi Jane
That all looks entirely sensible to me.
Thanks
Patrick
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From: Mark R Davies
Sent: Tuesday, July 3, 2018 8:37:52 AM
To: Jane MacLeod; Rodric Williams; Mark Underwood1; Andrew Parsons; Patrick Bourke; Melanie Corfield
Subject: Re: POSTMASTER LITIGATION - DRAFT WORDING FOR THE ARA - CONFIDENTIAL AND SUBJECT TO LEGAL
PRIVILEGE
All
My only comment is a suggestion we change « the issues » in para 2 to « any issues ».
Mark
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From: Jane MacLeod
Sent: Tuesday, July 3, 2018 8:29:05 AM
To: Rodric Williams; Mark Underwood1; Andrew Parsons; Mark R Davies; Patrick Bourke; Melanie Corfield
Subject: RE: POSTMASTER LITIGATION - DRAFT WORDING FOR THE ARA - CONFIDENTIAL AND SUBJECT TO LEGAL
PRIVILEGE
All
Any final comments on the final draft as sent by Rod yesterday?
The process once we have agreed it, is to circulate the draft wording to Paula & Al and make sure they are comfortable,
then to circulate to the ARC members (Tom C has asked for the ‘shareholder’ to review as well}, and then to send to EY ~
all of which we need to do before the beginning of next week as EY needs to set up their internal review panel.
Jane
For information, the following is the proposed text of the ARC minutes:
“Post Office Group Litigation CONFIDENTIAL AND SUBJECT TO LEGAL PRIVILEGE
Discussion turned to the disclosure of the Group Litigation. It was understood that the extent of disclosure
had become a substantive issue since the Committee’s last meeting. Solicitors on behalf of the claimants
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had recently included an estimate of £80m to £90m in a skeleton argument submitted to Court relating to
cost budgeting, and EY had recommended the disclosure of this figure. PM believed that the estimated figure
should be disclosed as:
(a) The claimants’ had initiated litigation in 2016 and while previous ARA’s had included a description
of the Group Litigation within the note on contingent liabilities, the claim had not been quantified.
(b) There were two trails now scheduled in the financial year to discuss preliminary issues.
(c) The figures contained in the skeleton argument, while heavily caveated, were now technically in
the public domain
(d) The figures were material and could be considered as the best current estimate of the scale of
the potential damages to be sought. PM recognised that disclosure of the figure could be
accompanied by a Post Office narrative challenging the reliability of the estimate.
(e) There was no suggestion that PO could not continue as a going concern.
(f) I Depending on the extent of the disclosure, EY would consider whether it would include an emphasis
of matter statement in its audit report. It was acknowledged that this was neither EY nor Post
Office’s preferred solution. Accordingly, PM requested the Committee to reflect on the extent of
its disclosure and agree updated wording for review by EY. Following receipt of the wording, EY
would convene an internal panel to consider whether the proposed note would be sufficient and
correspondingly, whether an emphasis of matter statement would be included.
The Committee noted the text of the existing note, together with alternative examples of disclosures
provided by JM, and assessed the potential implications arising from each of the options. The following
points were considered:
(a) Timing: the Committee noted that given the nature of the issues to be considered at the upcoming
Common Issues and Horizon trials it was not likely that the Claimants’ damages would be
quantified until after conclusion of those trials and receipt of the respective decisions.
(b) I Purpose: The Committee noted that the estimate included in the Skeleton Argument did not
represent a formal assessment of damages, was expressed to be “subject to further quantum
analysis and formulation” and was only intended to be used as a guide for proportionality of costs,
and the Claimants’ solicitors had stated “There are inherent difficulties to setting out the quantum
of these claims at this stage and the figures should be relied upon solely as a suitable guide for
the purposes of proportionality considerations in costs budgeting.” JM advised that the Post Office
had asked the claimants’ solicitor to explain the calculation but a response had not been received.
(c) Accuracy: The Committee agreed that given the relatively early stage in proceedings, it could not
be confident that the quoted figure was within a reasonably appropriate range, and indeed
potential damages once quantified could be materially larger or smaller, and therefore disclosure
of a number now could be misleading.
(d) Reputation: The Committee noted that, as a trusted brand, Post Office must operate in a fair and
transparent manner. The Committee discussed who might rely on the disclosure of the figure in
the accounts. The Shareholder was conversant with the latest developments in the Group
Litigation and the ARA would highlight that the Post Office was defending a large claim. In the
circumstances, the Committee believed it was unlikely that the omission of an estimated figure
would mislead a stakeholder and cause them to act to their disadvantage. The Communications
Team was equipped to respond to any enquiries.
(e) Proportionality: The Committee noted that for Post Office to reference the number in its
accounts would lend credence to the figure and that this may have unintended consequences
and be damaging to Post Office’s defence. It was noted that Post Office’s legal team
recommended against disclosure.
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Following careful consideration the Committee concluded that the existing draft disclosure in the contingent
liability note needed to be expanded, however they did not believe that disclosure of the estimated
aggregate claim value (provided as part of a skeleton argument) would be a reliable and fair reflection of
the size of claim. They therefore expressed a strong preference not to disclose the Claimant's estimated
figure. The Committee authorised JM to draft and circulate proposed wording for the Group Litigation note.
The Committee would agree the final wording by correspondence before onward submission to the EY panel.
The Committee was advised that EY would seek the advice of its internal evaluation panel in the week
commencing 9 July before confirming its final position on management of the disclosure. Accordingly the
Committee agreed to convene an extraordinary meeting later in July to receive EY’s conclusion, review the
ARA and make its recommendations to the Board.
The Committee noted the Financial Results report.”
Jane MacLeod
Group Director of Legal, Risk & Governance
Ground Floor
20 Finsbury Street
LONDON
ECZY 9AQ
From: Rodric Williams
Sent: 02 July 2018 16:07
To: Jane MacLeod
Andrew Parsons
ID SUBJECT TO LEGAL
PRIVILEGE
All ~ following a discussion with Jane, I have made a further amendment to address the specific point made by our
auditors, which is that the Particulars of Claim (both Generic and Individual) do not specify a claim value or range as
would normally be expected.
The final sentence of the second paragraph of both versions now reads “To date, the Claimants have not asserted the
aggregate value of their claims in any of the Particulars of Claim filed in the litigation.”
The full document can still be accessed by clicking h
Rod
From: Rodric Williams
Sent: 02 July 2018 15:06
To: Jane MacLeod
Andrew Parsons
; Mark Underwoo
Mark R Davies ¢
; eld ¢
POSTMASTER LITIGATION - DRAFT WORDING FOR THE ARA - CONFIDENTIAL AND SUBJECT TO LEGAL
Subje
PRIVILEGE
Jane,
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{have put a revised version (clean, not tracked) on SharePoint (click here}, which seeks to address your point by
referencing the only document which formally sets out a claim value, namely the Claim Forms. I realise that this may be
picked up as “understating” the potential claim value, but as it stands the Clair Forms remain the only valuations
formaily asserted by the Claimants.
Andy ~ ’ll email you the wording.
Rod
From: Jane MacLeod
Sent: 30 June 2018 16:29
To: Mark Underwoot
+; Andrew Parsons
Mark R Davies ¢
RO 3 ield
POSTMASTER LITIGATION - DRAFT WORDING FOR THE ARA - CONFIDENTIAL AND SUBJECT TO LEGAL
Subje
PRIVILEGE
Thanks Mark
i'm happy with your wording in principle, however EY were keen that we include something to say that the claimants
have not formally set out their claim for damages/losses. So could we please have some legally correct wording
included that makes that clear? Saying that the court hasn’t ordered the process doesn’t quite go far enough.
Apologies that was the intention behind my ‘statement of claim’ wording — however on reflection I didn’t actually ask for
the correct wording!
Thanks
Jane
Jane MacLeod
Group Director of Lega, Risk & Governance
Ground Floor
20 Finsbury Street
LONDON
EC2Y 9AQ
From: Mark Underwood1
Sent: 30 June 2018 13:42
To: Jane MacLeod
Rodric Williams
GRO ~ Patrick Bourke
; Melanie Corfiel "GRO b
POSTMASTER LITIGATION - DRAFT WORDING FOR THE ARA - CONFIDENTIAL AND SUBJECT TO LEGAL
Subje
PRIVILEGE
Thanks Jane,
My comments and suggested track changes for this copy list’s consideration are attached.
Mark
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Ny Mark Underwood
Head of Portfolio: Legal, Risk & Governance
Ground Floor
i 20 Finsbury Street
2017 Winner of the Global Postal Award 7) UP") AQ
for Customer Experience
From: Jane MacLeod
Sent: 28 June 2018 17:21
“} Rodric Williams Mark
To: Andrew Parsons
Underwoot Patrick Bourke
GRO } Mark R Davies
Melanie Corfield ¢ fa
Subject: POSTMASTER LITIGATION - DRAFT WORDING FOR THE ARA - CONFIDENTIAL AND SUBJECT TO LEGAL PRIVILEGE
All
There was a lively debate at the ARC today about the extent of disclosure required, and the pros & cons of the various
options. In particular:
e It was recognised that ‘quoting’ the number, gave it a credence that it wouldn’t otherwise have
The risk of over-stating the quantum was as great as the risk of understating it
e It is relevant that no ‘statement of claim’ has yet been received setting out the quantum of damages, and it was
recognised that this may not be received before the end of the financial year.
e It was important that some context be provided to protect the directors so that it is clear that they are not
ignoring the potential impact.
.
EY have asked us to mock up drafting for them to consider, although it is clear that they will push for a more
conservative view. Accordingly I have drafted the attached versions for consideration and comment. The key difference
is the first one references the £80-£90 figure (and qualifications) and the second version doesn’t.
I would be grateful for your thoughts on each version - the more detail we provide, the greater the chance that EY won’t
consider that they need to include the number in their ‘emphasis of matter’ (which seems to be their likely
outcome). I’m sure I haven’t correctly referred to the document that sets out the quantification of claims and damages
— referred to here as a ‘statement of claim’.
All suggestions, gratefully received,
Jane
® Jane MacLeod
Group Director of Legal, Risk & Governance
Ground Floor
20 Finsbury Street:
LONDON
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