4.
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ANNOTATED AGENDA FOR SECOND SIGHT
30 SEPTEMBER 2014
Attendees
Post Office Second Sight
Chris Aujard Ron Warmington
Belinda Crowe lan Henderson
Rodric Williams Chris Holyoak
Andy Parsons
Aims for the meeting
Relationship — new ground rules for engagement going forward
Commercials — new fixed price linked to productivity
Quality — Ensure SS understand that they need to operate as professionals — no more un-evidenced
statements/reports.
Rate Of Delivery
SS plan to clear backlog by October (producing circa 5 a week) and then revert to 3. a week. Ron has stated at WG
and again to BC that under no contractual obligation to produce 3 reports. We need to place him under one. SS
productivity high last week at 6 draft and 1 final reports
Rate of delivery unacceptable as is repeated insistence you are delivering when you are not.
Stated you are not under contract to deliver 3 cases a week — we will need to change that
Even with last week’s spike (6 drafts and 1 final) you are only producing 1.5 a week
Quality
5S quality has consistently fallen short of expectations in both case reports and other reports.
Very disappointed in the quality of the Part Two report — unacceptable that we had to send out a 60 page
response due to the inaccuracy of your work
Case analysis frequently lacks intellectual rigour and logic — manifested in little proper evidence or critical
reasoning and a worrying tendency to appear willing to be swayed easily by less than compelling and un-
evidenced assertions or special pleadings, including where these contradict the findings of a Court process, eg
M052 where you are suggesting we mediate as you now believe the applicant committed perjury, contrary to
your initial conclusion
Also now Part Two complete it appears to being used to provide un-evidenced solutions where SS have not been
able to find the cause of the loss
Manner of Delivery
SS engagement has been poor since 2012. They have failed to engage properly on the facts of cases and have
been difficult to pin down to meetings requiring senior escalation. Repeatedly blur scope of engagement and
make unprofessional un-evidenced allegations.
Been very disappointed in the manner of your engagement -two years you have failed to engage with the team
on the substantive issues such as our feedback on your case reports
Frankly am sick of the un-evidenced bluster like your “search for the truth” and thematic 18 — which is not a
neither thematic or true. We will writing to you formally following the meeting
Tone in which you engage with the team is unacceptable for a professional service provider — expect it to improve
from now on
Cost of Delivery and Future Proposal
Second Sight proposal of £3500 per report including, historic average report cost circa £5000.
Cost has been high and proposal is still substantially too high
Willing to consider Fixed fee of £2500 a report
But must be linked to rate of delivery, only invoice every 12 final reports produced, Must produce at 3 per week
to qualify for full fee
15% of the fee retained until Post Office agrees satisfactory conclusion of SS’s engagement
£20K bonus payment for successful completion of all Second Sight work by 30 April 2015.
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Briefing Paper: SS Engagement 30/09/2014
Background
On 24/09/14, SS were sent a letter inviting them to attend a meeting on 30/09/14 to discuss concerns
surrounding their delivery of services to Post Office and the Working Group.
Areas for concern included the quality; rate and manner of delivery; and value for money. A face to face meeting,
for which this brief has been prepared, is scheduled for Tuesday 30 September 2014.
The following provides evidence for the points raised in the letter.
Rate of deliver
1) At the Working Group on 12 June, SS confirmed they would deliver a minimum of 3 reports a week with an
increase in production to be expected within a few weeks of the meeting.
1.1 In addition, on 1* July SS signed a letter of engagement. This included a commitment to conduct services
provided “In an efficient manner and with a view to ensuring that the costs of the scheme are reasonable”.
More than 15 weeks have since passed,
23 final CRR reports have been produced, at an average of 1.5 a week,
Only 3 times have SS managed to produce and supply the number of reports they committed to - despite telling
the Working Group on 11" September that they were doing so,
At the last WG meeting they admitted to a seven week backlog (16.09.2014).
Looking at the first ten CRRs produced:
SS invoices show that prior to making the commitment on 12" June, SS had already begun work on five of these
reports. Thus, SS should have been in an educated enough position to understand the level of work involved in
producing a Final CRR and the likely timeframes involved. Despite this:
They took an average of 11 weeks to produce from the time the Post Office Investigation Reports were shared:
seven weeks to reach Draft and an average four further weeks to reach final.
They were subject to an average three weeks slippage to reach draft, and two working days slippage to reach
final.
However, it should be noted that most recently SS have produced:
1 Draft & 7 finals for week commencing 08/09/2014,
3 Drafts & 3 finals for week commencing 15/09/2014,
6 Drafts & 1 final for week commencing 22/09/2014,
At the last WG meeting SS explained that they were now in a position to reduce the backlog and they expected in
future to produce 4 reports a week and definitely no less than three.
Quality
2) The quality of the CRR reports have been subject to minuted WG concerns over their style and quality.
2.1 On 07/03/2014, the WG agreed SS reports (namely M001 & M014) needed to be revisited to (amongst other
concerns) “Ensure conclusions are reasoned and supported by evidence”
Despite agreement, CRR’s! do not provide detailed referencing for the sources cited - nor do they always provide
supporting evidence or reasoning to substantiate the points made. For example:
* Based on analysis of the first ten CRRs - for which work had not begun prior to the meeting on 07/03/14
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= M022 states ‘Taking all of these facts and circumstances into account, we believe that Post Office should bear a
significant proportion of the responsibility for the losses that did occur’
= M009 states ‘we do not find the argument by Post Office... particularly compelling.’
= M057 states ‘we believe on the balance of probabilities, that the applicant was responsible for the loss’
= M048 states ‘On the balance of probabilities we believe that the losses were caused either by user error or
theft...’
No explanation is given as to how the probabilities have been balanced. This is despite, on the 13/03/2014 the
chair preparing suggestions for how could approach their work on claims. Guidance included “In giving its
opinion on disputed issues of fact, SS should explain what standard of proof SS has applied, ranging from sure
to probable/likely”
Issues surrounding the quality of reports have however continued. For example:
* On 1 May the Working Group discussed M022. A range of concerns about quality were raised at this point by Post
Office, including that:
"The Applicant would need the Part One report,
= The depth of analysis was not sufficient,
= Aclearer articulation was needed of the factual basis upon which conclusions were made,
"Neutral language needed to be used,
= The evidence used needed to be clearly balanced with any counterpoint brought forward,
= Un-evidenced statements needed to be avoided,
= Raising real or implied questions needed to be avoided,
= Itwas going beyond $S’s areas of expertise.
2.2 CRRs also provide limited (or no) explanation or evidence for why a case is suitable for mediation. For example:
e Section 6 all of the first ten CRRs recommend mediation. Limited (or no) reasoning is given and limited (or no)
reference is made to the preceding content in the CRR:
© The explanations given in M006, M022, M028, M048, M076, M127, simply state ‘We consider that...’ or ‘In our
opinion this case is suitable for Mediation and the following issue should be considered’.
2.3 More recently, an initial recommendation not to mediate case M052 in its ‘Final’ CRR was changed to a
recommendation to mediate the case in a version 2A of the report. This latter recommendation seems odd given
the detail included within the body of the report. Namely:
e An admission and subsequent verdict of guilty to 11 charges of theft (with a further 23 taken into consideration)
at St Albans County Court.
* Acknowledgment that “the expiry of document retention periods has resulted in it no longer being possible to
offer a fully evidenced opinion on a number of matters raised by the applicant”.
The argument for mediation appears to be based upon the idea:
© The Applicant only pleaded guilty to avoid a potential custodial sentence,
¢ The Applicant then concocted a story as to why she stole the money to persuade the court she was guilty and,
e Had she not pleaded guilty, Post office’s evidence would not have stood up to scrutiny in court.
However, the ‘Final’ CRR (superseded by V2A) acknowledges that “The adequacy or otherwise of the Post Office
investigation process has no relevance in the light of the Applicant’s guilty plea, since the evidence was never
considered by the court. Since this is the only substantive point raised by the applicant, there are consequently
no issues for us to consider. Issues relating to Post Office prosecution policy, and the conduct of any prosecution
and whether or not it should be deemed ‘safe’, fall outside of our (SS) terms of reference”.
The sentence in bold above, was removed from the CRR V2A.
yRPwn
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Manner
3) There have been a number of incidences where SS has failed to properly engage in the manner we would
expect of professional advisors. In particular, in relation to:
The spot reviews (ten reviews),
The detailed briefing notes (four sets),
The feedback/comments provided on the draft CRRs (24 sets of comments).
3.1 Where revisions are made, they tend to reflect the more minor points of detail raised by the PO and do not
always (fully) reflect or acknowledge the more major and substantive points raised by the PO in their response
letters. For example:
With regards to case M127, Post Office comment ‘...no evidence of theft or any other criminal wrong-doing has
been found.’ (Post Office Response Letter, p.10). The text of the Final CRR remains unchanged stating ‘It is entirely
possible that these two branches were subjected to such attacks, and Post Office’s failure to investigate either of
the two substantial shortfalls...means that these types of external theft may have contributed to the losses.’
(M127, p.9). Although reference is made to ‘elegant techniques’, how such theft might work and why it could
reasonably be expected to have occurred is not explained.
The text of the Final CRR for M028 states ‘It is unfortunate that further steps were not taken at the time to
conclusively establish the cause of the losses. This appears to demonstrate a weakness in the support framework
available to the Applicant’ (M028, p.5). This does not acknowledge or reflect the point made by Post Office that
‘The CRR does not explain what additional steps could have been taken to establish the cause of the losses
conclusively. In fact Post Office went to significant lengths to investigate the cause of the shortfalls...’ (Post Office
Response Letter, p.10).
Value for money
4) Discussions around perceived value for money will likely focus on negotiating a piece rate for CRR reports
going forward.
4.1 Again, referring back to the letter of engagement, signed on 1* July - this included a commitment to conduct
services provided “In an efficient manner and with a view to ensuring that the costs of the scheme are
reasonable”.
To date, SS have invoiced PO £650k for work undertaken within the scheme,
The average cost of attributed to in SS invoices #86-93 for the production of the first ten final CRRs is £4.5k per
report (though this is likely to be an underestimate due to gaps in invoice data),
This equates to an average of just under £1k per page.
4.2 Second Sights Commercial Offer
Background
Second Sight will charge Post Office a fixed fee of £3,500 for each final CRR delivered to the Working Group (to
include the delivery of both draft and final reports).
The fixed fee will be inclusive of participation at weekly conference calls and monthly face to face meetings
Out of pocket expenses will be charged at cost.
The fixed fee proposal will apply to all new CRRs where work starts on or after 1 September 2014.
Normal time and cost fees will be charged up to 31 August 2014 on all cases and subsequently for CRRs that are
Work in Progress as at 31 August 2014.
Second Sight will absorb the costs of Kim Evans for the month of August 2014.
Comment
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In the letter we have indicated the proposal is too high and productivity needs to be linked to fees.
Proposed Counter Proposal
Fixed fee of £2500 a report — this takes account of the more junior resource being brought in to work on reports —
which should result in a lower blended rate
Agree the fee should cover Working Group participation and preparation.
Out of pocket expenses at cost
Any request for further work on a time and material basismust be submitted in writing to the General Counsel
and must have specific prior written authorisation from the Post Office before work commences
Invoices only to be accepted every 12 final reports completed — this should be every 4 weeks.
15% of the fee retained until Post Office signs off the satisfactory conclusion of Second Sight’s engagement
£20K bonus payment for successful completion of all Second Sight work by 30 April 2015.
5% reduction in fee per report not delivered at the agreed 3 per week schedule.
Willing to review the cases commenced prior to 31 August 2014 — still awaiting a response to Belinda’s request.
RED LINE on unit cost
Not agree to any unit cost above £3000
No ability to carry out any work other than report production
Overall Recommendations
In order for the CRRs to deliver against what is required from the Terms of Reference and Scheme
documentation, it is recommended that:
The production of remaining Final CRRs are subject to cost, quality and timeliness control,
The level of assessment offered in the CRRs is increased, with the reasoning made clear and links provided to the
relevant evidence,
More detailed explanation is given as to why cases are (or are not) suitable for mediation with reference to the
findings in the report,
Explanation of alternative views is provided and an opinion given as to which is to be preferred and why,
The precision of the referencing and citations is improved,
Delivery is regularly measured against the Scope of Services and Scheme objectives,
The level of case specific detail in the supporting invoices is increased.
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