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Telephone attendance
Client: Royal Mail Group PLC Sub Postmaster Litigation
Matter: Mr Lee Castleton Matter no: 348035.134
Attending: Mark Turner
Name: Stephen Dilley Location: N/A Date: 8 September 2006
Start time: Units: 54 mins
I had an open telephone conversation with Mark Turner of Rowe Cohen Solicitors. We
discussed the following points :-
1. I referred him to his letter dated 25 July 2006 to Bond Pearce and specifically to
paragraph 4 of that letter. In that letter he said that the figure of cash and stock carried
over from Week 41 was £92,374.74. I asked him to get cash accounts for Weeks 41 and 42
in front of him. He did so. I explained to him that the figure actually carried forward from
Week 41 was £54,170.02 for the cash and stock referring him to Page 2 of cash account
Week 41 and explaining that that is carried forward to Week 42 because that is the cash and
stock at the end of Week 41 because it says at the top of that page that it is week ending 7
January 2004. I said that therefore we believe that the calculations Mr Castleton had carried
out as set out in their 25 July letter were inaccurate. The sum of £92,374.74 is the cash,
stock etc. carried forward from Week 42 to 43 and referring him to Page 2 of the cash
account for Week 42 for that information. I also said to him that we really weren't sure what
Mr Castleton had done by way of a manual reconciliation but that I wanted to explain to him
why Mr Castleton had been inaccurate before he instructed his expert, so that his expert
didn’t go down the same wrong route. He said that he had thought that he had accurately
set out what his client’s case was in that regard but he needs now to go back to his client
just to check that his client is comparing the right weeks, but he understands what I was
trying to say to him.
2. I told him that we had received a fee quote for our expert and that that fee quote was
£62,000 plus VAT just for the Accountancy Expert. He said that did not surprise him and
that their expert at the moment was just working on Week 42, but if you extrapolated that
for the entire period, he could see how we arrived at the figure of £62,000. I explained to
him that for that amount of money our expert was saying that they were going to do a very
thorough job and look at the cash accounts before, during and after the time in question.
3. I explained to him that I had for the past few months been meeting various witnesses
around the country to discuss this with them. The common theme that came out was not
just that they were confident with the Horizon System but they were extremely confident
with it. In particular I explained to him that I had more or less cross examined a roomful of
IT people at Fujitsu on every single issue raised in the Part 20 Reply that he had sent to me
and the summary of what they said was that irrespective of whether Mr Castleton was
experiencing those computer problems that he said he was (which is not admitted), it
wouldn’t have had any effect on his balancing and wouldn't explain where the monies had
gone.
4. In view of this, we fully expect that our expert will support what our witnesses are saying
and you really would be surprised if the expert said that there were no losses.
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5. I was conscious that he had referred to ADR earlier this week. Speaking on a without
yr ‘udice basis with him, I said that if the experts’ reports swung very heavily one way or
a. .cher, this may cause either side to rethink their position and he agreed with me. I said
that the downside of that is that we expect the expert will support our position, but on the
accountancy side alone, the Post Office will have incurred £62,000 plus VAT on their Expert
Report, so if the Expert Report does as we think support our position, then we will look to Mr
Castleton for that either at Trial or ADR. He acknowledged that the costs were
disproportionate to what is at stake. Accordingly, whilst the parties may be more informed
after exchange of Experts’ Reports, commercially they may find it harder to settle because
Mr Castleton might not necessarily have £62,000 in addition to the Claim and other costs
that we are seeking, to be able to pay us.
He explained that he had advised Mr Castleton to disclose their Expert's analysis (once
completed) just for Week 42 to us, to see whether that could perhaps generate settlement.
6. I suggested to him the following :-
(a) We agree a date for Witness Statement exchange - at the earliest to be in the week
commencing 25 September, but probably later because I do not yet know when Ruth
Simpson will be available for interview.
(b) We also agree amendments to Pleadings. He said he had no objection in principle to
this. He was just awaiting client instructions on these points.
(c) Mr Castleton then provides us with his Expert's Report on a without prejudice basis.
(d) We look at that and instruct our Expert to do a summary response, which will hopefully
be cheaper than £62,000 and that would have an obvious benefit to Mr Castleton on
settlement if the experts say what we think they will. i.e. we wouldn’t be looking to Mr
Castleton for the £62,000 costs, or whatever lesser cost it was.
(e) We then have an ADR.
(f) We vacate the Trial date.
I said if we agreed these sorts of directions we would probably need to ask the Court to have
an Agent at Case Management Conference to see if they will agree this.
Mr Turner could entirely see the sense of what I was saying, but he will need to take
instructions from his client and then he will come back to me.
L also said to him that I wanted to make it plain that our client was not necessarily saying
that Mr Castleton had taken the money. Our client does not say one thing either way or the
other in that regard. It does not have to. All it has to do is to say that Mr Castleton failed to
account for the money. There could be other parties that benefited from the cash going
missing and I wasn’t necessarily saying that it was one of his Assistants either. However, I
just wanted to make sure that Mr Castleton understood that in case it was a point of honour
with him. There could certainly be scenarios in which he had caused the loss or had been
responsible for the loss to the Post Office without necessarily having benefited from the
money himself. He told me that Mr Castleton did understand this to be the position.
I said to him that the main point in our case was that everything was kept the same when
the personnel was changed, in terms of hardware. He said that he thought he agreed me in
terms of hardware but thought there was a software update on or around 24 March that took
several hours and Mr Castleton was probably going to contend that that effectively fixed any
problems that had been occurring with his computer. I said that I had disclosed a list of all
the software updates to him and I couldn’t from memory remember that there had been a
software update on 24 March. He said that he wasn’t really sure about the 24 March date
and would come back to me.
I will await to hear from him and pressed him to come back to me as soon as possible.
Time engaged including attendance note - 54 mins.
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