POL00145716
POL00145716
From: Piero D'Agostino}
Sent: Mon 29/07/2013
To: Susan Crichton:
16:53 PM (UTC)
Parsons,
Andrew
Ce: Matthews, Gavin'
Subject: RE: Proposed letter to JLT re: Horizon
Will do. Thanks Andy.
From: Susan Crichton
Sent: 29 July 2013 17:53
To: Parsons, Andrew; Piero D'Agostino
Cc: Matthews, Gavin
Subject: RE: Proposed letter to JLT re: Horizon
Thanks Andy, Piero can you take Charles through this.
Susan
From: Parsons, Andrew:
Sent: 29 July 2013 16:05
To: Susan Crichton; Piero D'Agostino
Cc: Matthews, Gavin
Subject: RE: Proposed letter to JLT re: Horizon
Susan, Piero
I've spoken to one of our insurance lawyers re the D&O cover.
Summary
¢ The policy is unlikely to provide cover against the types of claims that SPMRs might bring against POL's
directors arising out of the Horizon situation.
¢ One area that would be covered is a derivative action by POL or BIS against POL's directors for breach of
their directors’ duties. As advised previously, on the information we have seen, we don't believe that POL's
directors have breached their duties.
¢ There is therefore no strict requirement for POL to notify its insurer at the moment — though, if in doubt, best
practice is to notify.
e — The risk of notification is that it would look bad for POL if it ever became public knowledge that POL had
notified its insurer.
e To reduce this risk, it is recommended that rather than sending a formal written notification, POL speaks to
Chartis (renamed AIG) and verbally notifies them so as to not leave a paper trail. In our experience, AIG may
be prepared to accept a verbal notification.
e POL should make expressly clear to AIG that the notification is subject to litigation privilege (this should help
protect against disclosure under FOIA).
Policy
In essence the policy provides cover against:
¢ Written demands for compensation or formal proceedings (civil, criminal or regulatory) brought against the
D&Os which allege "wrongful acts". "Wrongful Acts" is defined (3.56) to include breach of duty qua director,
breach of s260(3) Companies Act, employment practice violations, Sarbanes Oxley violations, and securities
claims.
e Securities claims (defined in 3.45 essentially as violations of securities rules/regulations and derivative
actions by shareholders)
POL00145716
POL00145716
e — Investigations (3.26) — formal investigation into the affairs of the company or the D&QOs by a regulator or
government body "empowered by statute to investigate the affairs of..." the company and D&Os.
e Derivative claims under P11 of Companies Act.
The policy does not provide cover for defamation claims against D&Os.
Extensions to Cover
There are also several extensions of cover, most of which do not add materially to breadth of cover, going more to the
types of financial loss which can be recovered once the policy is triggered.
However, it is worth highlighting the Self Report Extension (2.14). Defined in 3.46 — 3.47, this is triggered by an
internal enquiry by the company into the affairs of the company following a "...formal written notification to an official
body [regulators or government bodies empowered by statute as above]... informing them of an actual or suspected
material breach of an insured person's legal or regulatory duties if and to the extent that such enquiry is requested by
an official body." We do not think this has been triggered yet.
Notification Obligations
Under Clause 5.5, POL has to notify "any claim" as soon as practicable, but must be during the policy (or relevant
discovery) period.
POL may also notify circumstances which are "reasonably expected to give rise to a claim". It is difficult to say with
certainty what this means legally other than the fact that it is an objective test. However, the threshold for notifying
something is likely to be a realistic possibility: something more than at least possible and less than more likely than
not. The usual advice in these circumstances is, if in doubt, notify. The provision specifies what information the
notice must contain, to whom and how it must be notified. Notice must be in writing, but we think that AIG would be
prepared to waive that formality and allow POL verbally notify.
FOIA and privilege
Notification to an insurer is potentially subject to disclosure under FOIA. Please note FOIA applies to all information —
verbal or written.
There is an exemption from disclosure under FOIA where information is privileged. Notification to an insurer, where
there is a known claim, is usually subject to litigation privilege.
However, litigation privilege only applies where "litigation" is actually contemplated, not where there is just the risk of a
hypothetical claim. In the context of claims against a director, we have arguably not yet reached the stage of
contemplated litigation, rather we are just dealing in hypotheticals.
Nevertheless, we would rely on Alan Bates' comment that he is aware of SPMRs lining up claims against POL's
directors as evidence of contemplated litigation.
As POL is in the nexus between live litigation and theoretical claims, we recommend verbal notification to AIG so to
balance insurance protection against brand protection.
Kind regards
Andy
Andrew Parsons
Senior Associate
for and on behalf of Bond Dickinson LLP
Follow Bond Dickinson
Blin
www.bonddickinson.com
From: Susan Crichto
Sent: 29 July 2013 11:
To: Piero D'Agostino; Parsons, Andrew
Subject: RE: Proposed letter to JLT re: Horizon
Where are we on this?
Thanks
Susan
From: Piero D'Agostino
Sent: 25 July 2013 14:29
To: 'andrew.parsons:
Cc: Susan Crichton
Subject: RE: Proposed letter to JLT re: Horizon
Andy,
This is the D&O policy. Can you please check?
Piero
From: Susan Crichton
Sent: 24 July 2013 20:27
To: Piero D'Agostino
Cc: ‘andrew. parsons}.
Subject: Re: Proposed letter to JLT re: Horizon
Thanks
Susan
From: Piero D'Agostino
Sent: Wednesday, July 24, 2013 07:07 PM
To: Susan Crichton _
Cc: 'andrew.parsons}_
Subject: Re: Proposed letter to JLT re
Horizon
I should be able to get it in the morning.
From: Susan Crichton
Sent: Wednesday, July 24, 2013 06:59 PM
To: Piero D'Agostino
Cc: 'andrew.parsons”
Subject: Fw: Proposed lettér to JLT Tr
Horizon
Piero - do we have a copy of the insurance policy?
POL00145716
POL00145716
POL00145716
POL00145716
Thanks
Susan
From: Parsons, Andrew {_
Sent: Wednesday, July 24, 2013 06:51 PM
To: Susan Crichton
Cc: Piero D'Agostino
Subject: Re: Proposed letter to JLT re: Horizon
Susan
The letter does nothing more than put POL's insurers on notice of the Horizon issues. It's very bland. My only
hesitation is whether this is strictly necessary to do. From a PR perspective, it would look bad if this got into
the public domain - sign of guilt / concern from the board.
I'd be happy to have one of our insurance lawyers look over the D&O policy to see if POL is required to notify
the insurers. If not, then we might want to hold fire on this.
I would recommend tweaking the first paragraph. The current version suggests that there are problems with
Horizon - when at present there are no systemic problems to report.
It should just say that the press have reported on "potential issues with Horizon" rather "financial
discrepancies have occurred in Horizon". Apologies, the letter is a pdf so I can't make changes to the
document itself.
Kind regards
Andy
Andrew Parsons
Senior Associate
Bond Dickinson LLP
Blackberry
weseenee Original message -
From: Susan Crichton
Date: 24/07/2013 09:17 (GMT+00:00)
To: "Parsons, Andrew"! ~
Ce: Piero D'Agostino < GRO
Subject: Fw: Proposed letter to JLT re: Horizon
Andy could you take a look at this its a draft letter to go to our insurance broker re the horizon issue. I have not looked
at it.
Thanks
Susan
From: Charles Colquhoun
Sent: Wednesday, July 24, 2013 07:23 AM
To: Chris M Day; Susan Crichton; Alwen Lyons; Piero D'Agostino
Subject: Proposed letter to JLT re: Horizon
Been discussing with Miller what we should tell JLT re: Horizon issues. We have worked up the attached
POL00145716
POL00145716
version - which hasn't been sent - any comments? I think we should send it this week so would welcome
comments over next day or so.
Regards
Charles
Charles Colquhoun I Head of Corporate Finance
treet, LONDON, EC1V 9HQ
This email and any attachments are confidential and intended for the addressee only. If you are not the named
recipient, you must not use, disclose, reproduce, copy or distribute the contents of this communication. If you have
received this in error, please contact the sender by reply email and then delete this email from your system. Any views
or opinions expressed within this email are solely those of the sender, unless otherwise specifically stated.
POST OFFICE LIMITED is registered in England and Wales no 2154540. Registered Office: 148 OLD STREET,
LONDON EC1V 9HQ.
Please consider the environment! Do you need to print this email?
The information in this e: y attachments is confidential a
vileged and protected by la only is authorised to
s, If you are not susan.crichtonf GRO} please notify andrew.parson:
on, distribution, publication or copying of this Communication or attachments is probit
access this,
fe Sn HRA be unlawful
ttached to this e-mail will have been checked by us with virus detection software before tran
be caused by software viruses and you should carry out your own virus checks before op.
sion, Bond Dickinson LLP accepts no liability for any loss or damage
any attachment
Content of this email which does not relate to the official business of Bond Dickinson LLP, is neither given nor endorsed by it.
This email is sent for and on behalf of Bond Dickinson LLP which is a limited liability partnership
office is St Ann's Wharf, 1 12 Quayside, Newcastle Upon Tyne, NE
the LLP, or an employee or consultant who is of equivalent standi
gistered in England and Wales under number 0C31766 1. Our
X, where a list of membs
dur VAT registration number is GB12
(0 inspection. We use the term partner to refer toa member of
Bond Dickinson LLP is authorised and regulated by the Solicitors jon Authority
This email and any attachments are confidential and intended for the addressee only. If you are not the named
recipient, you must not use, disclose, reproduce, copy or distribute the contents of this communication. If you have
received this in error, please contact the sender by reply email and then delete this email from your system. Any views
or opinions expressed within this email are solely those of the sender, unless otherwise specifically stated.
POST OFFICE LIMITED is registered in England and Wales no 2154540. Registered Office: 148 OLD STREET,
LONDON EC1V 9HQ.
JOH OB IIIS IIS IIS IO II IIIS ISI III III II II II II IIE
POL00145716
POL00145716
This email and any attachments are confidential and intended for the addressee only. If you are not the named recipient, you
must not use, disclose, reproduce, copy or distribute the contents of this communication. If you have received this in error,
please contact the sender by reply email and then delete this email from your system. Any views or opinions expressed within
this email are solely those of the sender, unless otherwise specifically stated.
POST OFFICE LIMITED is registered in England and Wales no 2154540. Registered Office: 148 OLD STREET, LONDON
EC1V 9HQ.