POL00154694
POL00154694
From:
Sent: oe
To: Jane MacLeod[__ GRO _
Subject: RE: Board Call on the GLO - Legally privileged and confidential
Thanks Jane.
Seems sensible and I suggest you get it out. Bit of inconsistency between bullets and numbered paras but I
don’t mind which.
Caught up with Tom C and he is in the “Judge isn’t that unfair and may be right” camp so not supportive of
the QC’s view. He would add to the list looking at the role of WBD and whether we need a fresh pair of eyes
there. And he specifically therefore doesn’t want you to rely on their advice to find a 3 QC.
Is that OK? Thanks Al
Alisdair Cameron
Chief Finance & Operating Officer
OFFICE
20 Finsbury Street
London
From: Jane MacLeod
Sent: 11 March 2019 1
To: Alisdair Cameron ¢_
Subject: RE: Board Call on the GLO - Legally privileged and confidential
Al
I’ve added my sections and put this into a Word document - it’s a bit long for an email!
Jane
Jane MacLeod
Group Director of Legal, Risk & Governance
Ground Floor
20 Finsbury Street
LONDON
EC2Y 9AQ
Mobile numbe
POL00154694
POL00154694
From: Alisdair Cameron
Sent: 11 March 2019 14:40
To: Jane MacLeod < GRO ~~
Subject: Board Call on the GLO - Legally privileged and confidential
Jane, this is, as discussed, the sort of note I can see us sending the Board this afternoon. I am assuming you
would replace the bit in italics with your text. What do you think: advice appreciated? Thanks Al
We have a Board call on the GLO at 10.30 Tuesday morning.
The key findings from a 300 page judgement are as follows, containing a number of challenges for us
operationally and as a brand. We would remind the Board that the judgement is in draft, embargoed and
cannot be discussed outside the management of the business. It will become public on Friday this week or
during next week. The Horizon trial has started today.
. Arrogant, self-serving and relative credibility etc
. Trading Statement
. Burden of proof and contractual clauses
NFSP
etc
URWNP
The Executive Team views such an extreme verdict as a potential crisis and the outcome will depend on
how we respond to the situation, both internally and in external messaging. We believe that the business
can emerge stronger from this crisis if we manage it effectively. However, this will require us to do some
things differently and change our priorities. The questions we are working through are set out below with
some limited comments. We do not expect to go through these at the call but we would welcome
observations, especially if anything appears missing.
Legal — Case - Jane
1. What is our QC’s view? Our QC, who will join the Board call, views the verdict as extreme and
beyond normal expectations: “crazytown”.
2. Are there any factual errors we need to correct and clarifications we need to seek? Yes and we have
until end Wednesday to do so. The team is compiling a list which we will review on Wednesday. This
may determine whether the Judge releases his judgement on Friday or next week.
3. What force does it have and what are the legal implications? The judgement does not mean we
have to do anything in particular but it defines our contacts with agents and therefore what would be
construed as a breach of contract.
4. Can we stop or block any part of the judgement? Our legal advice is clear that we can’t.
POL00154694
POL00154694
5. When do we have to appeal by, what would the basis of an appeal be and who will help us make a
decision? Can we justify a request for expedition? We have 21 days from the judgement being handed
down to appeal and the advice from our QC is that we should appeal on a number of points of law. We
are seeking a third QC to reach an independent view because our current QC is both responsible for
our strategy and emotionally engaged: he was criticised personally. We expect the shareholder to
want to be consulted on appeal.
6. Should we ask the judge to recuse himself (and appeal on that?) — and again we will need
independent help with that decision? This would be an unusual, nuclear option, especially if it was
triggered during the Horizon trial. It might play to accusations of arrogance. We need to review
carefully and with the same independent QC view. We are conscious that in the mediation scheme and
the Second Sight review other independent people also favoured the claimants.
7. What are the implications for the Horizon trial? We have briefed the team to not fall into the
arrogance trap but it is too late to radically vary our court strategy.
Legal - Operational clarification — Paula Bartlett
8. What is the full list of operational legal considerations?
9. Can we amend the contract or release a variation to enable our business in the context of this
judgement and how can it be agreed and delivered?
10. How can we operate a suspension process and termination process, of what length and recover
funds?
11. How can the branch trading statements be amended to comply with the Judge’s views?
12. How do we complete new network openings and what contract should we all be signing?
13. Can we get SPMss to acknowledge their accountability for cash when we give it to them?
14. How are we going to resource these additional legal questions?
Operational delivery — Julie Thomas
15. Lets’ assume we are working without the contractual protections that we have traditionally relied
on from Monday week. We will have to substantially pivot attention and resource. Increasing
POL00154694
POL00154694
compliance (cash declarations, balancing etc), managing new issues very transparently to settle
nerves, setting up a resource stream to capture, acknowledge and then respond to historical queries,
identifying potential losses even faster than we do today and providing far faster and better analysis
to support any request for money back, taking accounts of the answers to 9-13 above?
16. How do we create helpline, transaction correction and field capacity?
IT-Rob
17. Let’s plan for a bad Horizon outcome. What does that mean and how should we respond?
18. How do we work with Accenture and others to ensure we can cope with additional calls and other
demand?
19. Do we need to set up a potentially independent process for managing historical and new disputes
that are not captured by the litigation, potentially supported by an escrow account for values in
dispute?
Agents — Amanda Jones
20. How do we replace or augment the NFSP with user groups?
21. How do we seize the opportunity to change the agent relationship for the better, securing our
future? Money, ways of working, governance, ownership?
Communications — Mark
22. What are we communicating and how do we bridge the gap between legal and business
arguments? Our current headline is surprise but also real regret at the perception that we are
perceived as arrogant etc. Operationally, we will change to address this. We also recognise that the
vast majority of transactions do go through perfectly. The Judge’s reaction to us has led him to some
legal judgements that we think are mistaken and we will be looking at an appeal on points of law. Mel
23. What is the Media plan, and the plan for Parliamentary questions, both of which will need to be
agreed with BEIS. What we say, who says it, who we say it to. Mel
24. Plan for agents to settle and reassure — this is critical. Do we write to all agents immediately? Can
the NFSP play a role, taking into account the judge’s comments about them? Use Portand again as a
support agency.
POL00154694
POL00154694
25. Plan for our people — with this and Paula leaving it would be easy for people to wobble. We have
our senior leadership team together on Monday and GE direct reports will be told this week, in
confidence. The leadership team must be present, visible and reassuring over coming weeks. We have
to maintain a balance between crisis management and continuing narrative of progress and
development.
26. How do we support and protect our witnesses who have been publicly criticised? Individual
leadership.
27. Brand campaign — do we extend, replace, stop? Emma.
Stakeholders — Al, Mark
28. Government. Would Government be prepared to publicly state support, especially with other
Government departments? Will Ministers need to trigger an enquiry and if so of what support? Patrick
29. MPs and political parties Patrick
30. NFSP plus Debbie
31. The Banks. Martin K
32. Fujitsu. Rob
33. Royal Mail. Mark S
34. Bank of Ireland. Owen/CP.
35. CWU. Lee
36. WH Smiths and other multiples. Amanda.
37. Bank of England. Russell.
38. PwC. Going concern, ARA, disclosures and provisions. Micheal.
Governance
POL00154694
POL00154694
39. Project. We intend to separate the legal case management from the other workstreams. Both
need project management and we may get external support for the other streams. Daily Steering
Groups.
40. Board. We expect to have another call next week and turn over some of the Board meeting to this
subject. We should agree the role and remit of the sub-committee, assuming it will maintain its focus
on the litigation itself.
41. Shareholder. Especially focused on the legal case. Once we can talk to them we can agree how we
manage.
Funding and Budget
42. We are assuming we will need additional funds to manage the litigation, the outcome of the
litigation and our operations. A number of workstreams were already underway on optimising funding
which will continue including: buy out Santander security and get it removed from Government
security: agree NCS changes with BoE; Banks getting paid for deposits later for a fee; pushing further
on the optimal management of our facilities; sell Telco; and accelerate cost reductions if we can do so
without undermining the work above.
43. Would we recommend changes in the draft budget: do we need to free change and BAU money for
operational changes; what comes off the change plan (for example, should we aim off DMBs for a year
to protect the brand or continue to fous on change that improves our financial position); do we need
higher brand spend; what budget should we assume for DMB costs etc?
44. Should we try and finalise budgets as planned at March Board or do we need more time?