POL00148482
Scenario Three — Post Office
Defend Position
2 June 2014
DRAFT NOT POLICY
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@
Companies Act Section 172 — Directors Duties
In making decisions about the future direction of the Company Directors must have regard to Section 172 of the
Companies Act — ahead of other factors like negative PR. S 172 is set out below for reference:
(1) A director of a company must act in the way he considers, in good faith, would be most likely to promote the
success of the company for the benefit of its members as a whole, and in doing so have regard (amongst other
matters) to—
(a) the likely consequences of any decision in the long term,
(b) the interests of the company's employees,
(c) the need to foster the company's business relationships with suppliers, customers and others,
(d) the impact of the company's operations on the community and the environment,
(e) the desirability of the company maintaining a reputation for high standards of business conduct, and
(f) the need to act fairly as between members of the company.
(2) Where or to the extent that the purposes of the company consist of or include purposes other than the benefit
of its members, subsection (1) has effect as if the reference to promoting the success of the company for the
benefit of its members were to achieving those purposes.
(3) The duty imposed by this section has effect subject to any enactment or rule of law requiring directors, in
certain circumstances, to consider or act in the interests of creditors of the company.
C9
Post Office® COMMERCIAL IN CONFIDENCE AND LEGALLY PRIVILEGED
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Sparrow — communications approach continued @
Proposal: We continue administering the Scheme in the current manner, defending Post Office’s
interests robustly at all points particularly on:
* Criminal cases — where we will make clear to the Working Group we will investigate last and are
unlikely to mediate
* Bankruptcy — Where we will only engage if the Official Receiver has agreed to pass on the rights
[dn check wording]
* Old cases — where if no data is available we will refuse to investigate
« Ahard line deadline is set for CQR submission,
* Dissemination of the Linklaters and Deloitte assurance work
¢ Regular quality and delivery review meetings with Second Sight.
Narrative:
Subpostmasters are the lifeblood of our organisation and we want them to have faith in our systems
and processes. We are disappointed that members of the working group feel they no longer wish to
work with us to resolve all outstanding cases as quickly as possible.
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Post Office® COMMERCIAL IN CONFIDENCE AND LEGALLY PRIVILEGED
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Sparrow — communications approach continued @
As a responsible business the Post Office is committed to listening and learning from its people. As
such in 2012, following allegations raised with us by some subpostmasters, we set up an inquiry into
the Horizon computer system. We appointed an independent firm, Second Sight, to lead this inquiry.
In the two years since the inquiry began there has been no evidence of deficiencies with the Horizon
system. Indeed, Second Sight found no systemic issues in its report in 2013. It has since been
investigating cases and this work supports this finding.
We have also commissioned Deloitte to examine the Horizon system further and received assurance
around the integrity of the system, which deals with xxx million transactions every xxx.
As part of our commitment to investigate cases raised with us by a small number of subpostmasters
we set up a Mediation Scheme in order to offer an opportunity for them to have their cases heard. At
the same time we launched a Branch Support Programme to find ways of improving the support we
offer the subpostmaster community.
Having investigated xx of the xx cases submitted, it is clear that few of the cases submitted to us
revolve around the Horizon computer system.
We would like to thank the JFSA and others ?? for their input into the Scheme and would like to
reassure applicants that we will continue to investigate all cases and provide applicants with a report
of their investigation to help them understand what happened in their case
€
Post Office® COMMERCIAL IN CONFIDENCE AND LEGALLY PRIVILEGED
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Communications Approach Continued
When all investigations are completed we will consider what action is appropriate
in individual cases and what improvements can be made in the light of any
findings.
This is consistent with the approach we have taken with the Second Sight Interim
Report through our Brach Support Programme.
We will publish a report when all investigations have been completed.
Post Office® COMMERCIAL IN CONFIDENCE AND LEGALLY PRIVILEGED
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outcome of scheme
Potential for any
comment in R&A to
drive further interest
JFSA ramp up pressure
on JS and call for select
committee report
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PDP Summer-Christmas Run up to election 2 yrs + then
(Sep-Dec) (CET WEN) end of scheme
+ POL works within WG Slow progress of the + Fracture of Working Group + POL Takes control + All investigations
but asserts authority Scheme reviewed together
: Likely dlsappomtent Strained WG relations <All cases investigated . Decision taken on
Applicants expectation by POL
outcomes s aN
o miss match to + Decision and report
E + WG relations become outcomes released to all
a strained Series of mediations applicants at the same
[s)
Y I + Mediate a small number
of cases (30)
+ Scheme Closes
+ Potential for Potential for applicants + Allegation of white wash by + Applicant stories in + Further national
applicants or JFSA to to go to the media as POL resulting in 1-2 days press as not happy with coverage as applicants
go to the media as not not happy with result of media coverage (including the result of mediation and JFSA and SS not
happy with result of mediation of did not go those following such as or did not go to satisfied with the
mediation of did not to mediation. BBC,Computer Weekly and mediation scheme (BBC,
go to mediation. . = regionals — with a greater : Computer Weekly)
: Potential for increased push from other members of Award of [T6C Front further articles likely in
+ Potential for year on interest as more Working Group and ouates Office contract could Nationals such as
follow up by media applicants are 6 (GHP ANE «i result in IT Media and e S
following story ie dissatisfied with front JESS Mrs and others suggestin Miner, Mail and
BBC. compet : outcome of mediation Applicants further articles euleccront as : result porentally Broacsheets
Weekly, plus regional This culmination could Rely i Nefones of issues with horizon — ee ang ome .
print and broadcast drive further national bosihece e y damaging ability to seared ene
& following the story. stories x highlight benefits and .
Do = result in further negative + Applicant stories in
= SES? likely fo Become coverage. press as not happy with
= increasing vocal on
the result of mediation
or did not go to
mediation
JFSA continue to ramp
up pressure on JS and
call for select committee
report
+ MPs write to PV and
Minister concerned
MPs write to PV and
Minister concerned
+ MPs write to PV and
Minister concerned about
MPs write to PV and
Minister concerned
MPs write to PV and
Minister concerned