POL00201179
POL00201179
FILE NOTE: MEETING WITH TONY HOOPER
MONDAY 24™ FEBRUARY AT 2:30PM
IN ATTENDANCE: PAULA VENELLS (PV)
TONY HOOPER (TH)
CHRIS AUJARD (CA)
The meeting was held at PV’s request in order to discuss the progress of the mediation scheme with
TH. It was agreed that the meeting would be held “off the record”.
PV opened by explaining that she had just finished a meeting with Second Sight (SS), convened for a
similar purpose, (the timing of which was in part coincidental) and it was agreed that it would be
beneficial to relay to Tony the contents of that meeting. It was also explained that the cost of the
scheme was currently running at around £5m, and that that SS had estimated the compensation
costs could be up to £50m. The scheme had therefore moved a long way from its initial positioning
as something the outcome of which in many cases might be an apology and/or a small gratuitous
payment.
The meeting with SS had in large measure turned on whether, and how, SS could manage the
volume of reports that were in the process of being prepared and which would be with shortly be
passed to SS. Overall, some 35 cases were in the pipeline, and PV and the POL team were very
concerned that SS would not be able to process these cases, and produce reports on them, ina
meaningful timeframe. SS had seemed unable to provide any assurance that they could complete
their work by October 2014, the current projected end date of the scheme, with the impression
being left that it could carry on much longer than that.
TH agreed that SS were very resource challenged, and it would be difficult for them to meet the
current timetable. That said, TH’s view was that SS were trying to be objective and that they had a
difficult path to tread, in that in order to their job properly (in his view) they would need to express
an opinion on the merits of each claim. In TH’s view, this was something that they found hard to do.
Some concern was expressed by PV and CA that SS had not in their correspondence come across as
independent, and may be unduly influenced by the need to satisfy certain MPs, and JFSA.
The various ways forward were discussed. These included a) terminating the scheme entirely and
allowing SPMR’s to pursue their legal remedies through the courts and/or paying out compensation
to applicants in a formulaic manner (as per the email that PV had received from the A member of the
Board earlier in the day) ; b) restructuring the scheme such that it looks more like a mediation
scheme (with nothing being resolved until all the applicants CQRs had been received- this would
have the effect of pushing out any settlement payments for many months); c) augmenting SS’s
resources with resources from one of the big accountancy firms, either by displacing them in their
investigative role, or by placing resource alongside them; and d) reworking the process in the
scheme and streamlining it.
POL00201179
POL00201179
TH’s strong contention was that POL should take no precipitous action until such time as SS had
produced, say, 5 reports, and until we had seen their thematic report. He noted the adverse PR
consequences of terminating the scheme and also offered to make himself available to talk to the
Board to explain why he considered this approach appropriate, should that be necessary or
desirable. He indicated this would be in around four weeks and promised to be in touch at that
point; and any time before if helpful.
The quantum of the compensation payments was discussed. TH noted that the applicant’s CQRs
often painted a very distressing picture, where there had been a loss of livelihood, and other losses.
His view was that, should the evidence show that POL had not acted properly, then the amount of
compensation payable could be quite material [NB this contradicts the legal advice obtained by POL
from BD which categorically states that the maximum loss POL could expect to pay would be limited
to 3 months “pay” under the SPMR’s contract. When this was pointed out to TH, he defended his
contention on the basis that 3 month’s notice was a different proposition to summary termination,
obtaining a criminal record, losing the ability to sell the business etc.] It was not entirely clear
whether TH had in mind criminal cases only when he made these comments.
8. TH accepted that the professional advisers who were now asking for additional fees beyond
what was set out in the original Scheme documentation would have to be told that no extra fees
would be available for them.
9. TH twice indicated that mediation was not necessarily the best option now that we had a clearer
view of the wide-ranging claims being made. However, he qualified his comments each time,
acknowledging that mediation has many benefits. One of his concerns was that mediation typically
takes place before all the facts relating to every case are fully known. He also indicated that SS faced
a difficult challenge in that SS will be called upon to make a decision in the absence of a full audit
trail. That said, TH’s view was that SS will need to take a decision, however uncomfortable that may
be, even if their conclusion is that they cannot come up with a firm answer as to who was ‘at fault’.
Chris Aujard