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ANNOTATED AGENDA
MEETING WITH SECOND SIGHT
24 FEBRUARY 2014
1300
. Second Sight’s Plans
Second Sight have indicated that they are considering briefing/giving the Generic
report to MPs ahead of the Arbuthnot meeting.
. Scope of Second Sight’s Engagement
Letter of Engagement - current disagreement focusses on the Scope of the letter
and whether it should reflect the wider work Second Sight believe they are engaged
to carry out
Job One — Second Sight have commented this week that they are engaged on two
jobs. Job one is for MPs and is separate to their work on the Scheme (although
overlapping). They believe Post Office has committed to support and fund this
work.
Job Two — Job Two is the work Second Sight are carrying out for the Scheme which
is currently being delivered in parallel to Job one.
. Second Sight’s capacity
So far there have been delays on both Post Office side and from Second Sight who
have indicated they will not meet the 27 February deadline for the generic report but
hope to have two individual reports ready.
Post Office need a firm commitment on the number of cases Second Sight will be
able to review and report on a week
We suggest five cases a week from the point at which the generic report is
produced and by mid March at the latest.
. AOB
1)
2)
3)
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Second Sight’s Plans
Second Sight have been in contact at the end of the week to discuss the Arbuthnot
meeting — which they were surprised that Post Office were invited to.
In the course of that discussion they also raised the possibility of them presenting
the MPs with a copy of their generic report or briefing them on its contents.
This kind of intervention will not be helpful in terms of maintaining a clam
environment for Post Office to settle the mediation cases in.
However you might wish to offer the compromise that they can brief James
Arbuthnot on the contents of their report after it has been reviewed by the Working
Group — providing the Working Group agree to this.
Scope of Second Sight’s Engagement
This is an important opportunity to hear what Second Sight are willing to say about
their engagement by Post Office.
They have repeatedly been clear with Post Office that they are engaged on two
pieces of work.
They have declined to sign the first engagement letter as it is too narrow and does
not cover the MPs work explicitly.
They have asked for a second engagement letter to cover that work. So far Post
Office have declined to provide a second letter as we do not believe there is any
agreement for an ongoing piece of work.
To soften this news you may wish to offer to include the production of a final report
in the engagement letter.
The other key issue of contention with the engagement letter is the ability of Second
Sight to act against Post Office at some future point. This was included at the
Board’s request but Second Sight have portrayed this as an unlawful interference in
their ability to trade. Post Office are clear that the proposed clause is legal.
Second Sight’s capacity
Second Sight are currently working on five individual case reports and the
production of the generic report.
From their invoice we know that they are also spending a substantial amount of time
at the front end of the process talking to advisors and they are currently working on
at least five Case Questionnaire Responses.
The timeline of 27 February for the production of the generic report and the first four
case reports has slipped (again) and Second Sight currently envisage delivery two
individual case reports on 27 February.
This pace is concerning as Post Office currently have six cases in the final stage of
legal sign off and 15 full reports with Bond Dickinson and Cartwright King for review.
Post Office are investigating a further 18 reports using an investigative team of 22.
Second Sight do not appear to have the capacity to cope with the volume that is
coming and this will materially impact on Post Office’s ability to conclude the
Scheme by the end of the year.
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Options to increase the capacity of the Initial Complaint Review and Mediation
Scheme
In discussion internally and in Post Office we have identified three key options to increase
the capacity of the Scheme to ensure it completes in a timely fashion. The Status Quo has
been examined and discarded as it is felt it places both public money and the delivery of
the Scheme at too great a risk.
1) Aclean break from Second Sight engaging an alternative firm to review all the
cases for mediation and to produce a final report.
2) Supporting and Managing Second Sight moving Second Sight to a fixed price
contract for reviewing cases and a fixed price for producing a final report. This
option needs to be coupled with an agreement that if necessary Post Office can
chose to increase the capacity to review reports with an independent firm of Post
Office’s choosing.
3) Narrow Second Sight’s Scope moving Second Sight to a fixed price contract for
producing a final report and introduce an independent firm of accountants to take on
the mediation case review, whilst retaining Second Sight on the Working Group —
with working group Terms of Reference clarified so that it is clear that they oversee
the Scheme only.
The Three options are not mutually exclusive and in fact may provide a course of
escalation for Post Office to pursue with Second Sight should the current concerns
continue or intensify.
On that basis it is recommended that Option two is pursued at this point. While holding
option one and three in reserve.
A short assessment of the pros and cons of the options is set out below.
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Option One Option Two Option Three
Pros
v Safeguards public Y Post Office ability to manage I Y Post Office
money the Scheme increased ability to manage
the Scheme
v Clean break with y¥ Public money partially increased
Second Sight safeguarded
v Public money
v More resource v Avoids conflict partially
available to conclude safeguarded
the Scheme
v Scheme more
v Long term reduction likely to complete
in drain on senior on time
management time
v Satisfies
Y Post Office ability to ministerial
manage the Scheme commitment
established
Cons
* Will draw media * Risks delaying the issue * Continued long
attention and MP rather than tackling it term drain on
attention x Continued long term drain senior
x May lead to a focus on senior management time
in Parliament x Successful delivery of the management
* Difficult to sell to BIS Scheme is not assured time albeit
and Minister x Will eventually lead to reduced
* May lead to loss of adverse media coverage .
trust in the Scheme and reputational damage * Will eventually
* Nobinding contract I * Will be difficult to agree with lead to adverse
with Second Sight in Second Sight media coverage
place and reputational
damage
* Will be difficult to
agree with
Second Sight