POL00168007
POL00168007
FILE NOTE: MEETING WITH THE FOS
AT THE FOS’s OFFICES ON
MONDAY 17" MARCH AT 4:45PM
IN ATTENANCE: PAULA VENELLS (PV)
CHRIS AUJARD (CA)
TONY BOORMAN (FOS CEO) (TB)
CAROLINE WAYMAN (FOS Legal Director) (CW)
The meeting was held at PV’s request in order to discuss, in a very general way, the mediation
scheme (the Scheme) and see if there were any insights the FOS could offer. The meeting was low
key, informal and friendly.
PV opened by explaining that the background to the Scheme and POL’s initial expectations of it i.e.
that it was something the outcome which in many cases might be an apology and/or a small
gratuitous payment. This was to be contrasted with the current situation where, on current
estimates, the administrative costs alone would run to many millions of pounds and where the
aggregate of the amount of compensation now claimed was running at many tens of millions. It was
also explained that no evidence so far suggested that there was anything wrong with the Horizon
system, though it may well have been the case that the training and support provided to certain
SPMRs could have been better, and that the enforcement function may have been too heavy —
handed in its approach to dealing with losses discovered in the branch network.
TB’s headline view was that, given the large “expectation gap”, mediation was unlikely to prove to
be a satisfactory mechanism for bringing about closure. It was observed that in such types of cases,
the applicants tended to be very emotionally attached to their claims, and that in any event
mediation required much time intensive work by both sides, with each outcome being “hand-
crafted”.
A more administratively workable solution was likely to be one that relied on a “framework” of
some sort to assess whether or not an applicant should be paid compensation, and if so the
quantum of it. In this context, it was suggested by TB that it was entirely sensible for the guiding
design principles to be ones based on notions of “fairness” to applicants, not necessarily ones based
on legal principles. It was acknowledged by TB that in preparing such a framework, there were
arbitrary lines that had to be drawn and that there would be winners and losers — indeed, it may be
seen to be unfair on those that hadn’t applied to join the Scheme, but to some extent that was
unavoidable.
In understanding what was “fair”, it was useful to understand how decisions would be viewed by the
public at large; similarly in preparing the framework it would be useful to undertake some “dry runs”
and see what result was achieved with respect to a number of selected cases. A pragmatic approach
was encouraged as one likely to be most successful, but bearing in mind countervailing pressures
associated with the need to deal with tax payer’s money in a prudent way.
10.
POL00168007
POL00168007
TB further suggested that adopting a framework approach was not was necessarily inconsistent with
using mediators. Indeed the Scheme as currently configured could still be used, save that that the
role of the mediator might be re-structured to determine how the framework should be applied in
any particular case. For example if one of the (aggravating) factors in the framework was that of
whether the security team had acted in a “heavy- handed manner”, the role of the mediator could
be simply to help the parties agree whether or not they had, in the particular case in question, in fact
been heavy — handed.
The question of when the compensation decisions should be made was discussed. Both TB and CW
were of the view that this should be toward the end, if not at the very end, of the overall process,
after a substantial number of cases (if not all) had been reviewed/investigated. This was to ensure
fairness and consistency.
Ideas for dealing with the “expectation gap” were discussed, with TB suggesting that one way
forward might be for POL to commission independent (and potentially joint) legal advice from a
leading QC which could be made available to the JFSA and all applicants. It was understood that
such advice would show that any claim founded on legal principles was likely to result in a very low
compensation payment.
The various factors that could form part of the “framework” were discussed. Ideas considered
included :
© = The length of service of the SPMR
¢ Whether was any evidence that the SPMR had been treated in a heavy handed way by the
Security team
© How far off the SPMR was from retirement at the time he/she was summarily
terminated/suspended.
« Whether there had been any admission of guilt by the SPMR.
¢ Whether there had been any loss of value in the SPMRs non-post office business
PV raised the question of whether the FOS could offer its services on a consultancy basis to POL. CW
though that this would not be possible given the FOS statutory objective, but TB offered to make
himself available to talk to the (sub -committee of the) Board on an informal basis to share his
experience. PV and CA thanked TB and CW for their time.
Chris Aujard
17 March 2014