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CASES FOR DISCUSSION AT F2F
17 OCTOBER 2014
A. Scene Setter and Objectives
This discussion has the potential to be fraught. Not only we will be voting against mediation in all but
one case (and only then if pushed), but a majority also involve criminal convictions and/or cautions
However, the meeting does provide the opportunity to communicate some important messages the
Working Group as a whole and to its constituent parts. The hope, no matter how forlorn, is that we
begin to address some of the major challenges we face in operating the Scheme successfully and
fairly, for Applicants and for Post Office. While the Working Group’s proceedings are confidential, we
know that information finds its way to third parties.
Those issues are, together with a speaking note on each, appear below:
PO approach to Criminal Cases!
¢ Aware that PO decisions in criminal cases have been source of discussion
© Once again remind WG that, once its decision is made, it has no further role in the process —
the parties are free to decide what to do next
* PO decisions not taken lightly — we have re-investigated cases thoroughly and had the
benefit of SS’ own independent review — in cases so far, nothing has emerged which is
capable of questioning the safety of the convictions
* Each and every case will benefit from these additional and thorough investigations
¢ PO already under a duty to disclose any matters which come to its attention which could cast
doubt on the safety of a conviction
* Said at the outset, and say again, that the Scheme is not an appropriate platform from which
to challenge a conviction — that properly with the Courts
* POLnever filtered cases entering the Scheme by pre-guessing which cases merited
mediation. All Applicants were given a fair chance to prove that their complaint had merit
e If acase merited mediation (ie. there were questions around the safety of a conviction) then
a case may be mediated. However, no case so far has presented these circumstances
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e JFSA have been clear about the limitations of the Scheme (reference their communication to
Applicants below) and we would ask that the WG as a whole also register this
JFSA website:
lease let us know if you submit a registration
is all that is required. “
found on the ‘Documents’ page on the website, Again,
form regarding appeals, a quick email to horizon}
False accounting
e In those criminal cases with false accounting, POL considers the critical factor is the existence
of false accounting in a branch not the existence of a conviction:
¢ False accounting makes determining the underlying error that caused a loss almost
impossible
© Indeed, false accounting makes correcting errors in branch much more difficult which causes
losses to be incurred that might otherwise have been avoided. False accounting is therefore
an operative reason for why losses occur in a branch
* The Scheme is about Horizon not criminal cases. The fact there has been false accounting
makes the Applicant's task of showing that Horizon is defective impossible because the
branch accounts have been corrupted by the false accounting
* In conclusion, where there is established false accounting, it is very difficult, if not
impossible, to have a constructive conversation at mediation that will lead to a resolution or
closure for an Applicant
Default Recommendation to Mediate
e Anumber of cases have come through in which SS recommend mediation despite the weight
of evidence pointing, on any reasonable consideration, to the conclusion that the Applicant
was responsible for the losses
* While we do still see the potential value in allowing some of these applicants to voice their
concerns and benefit from a conversation, it cannot always be sensible to do so in the
context of a mediation
¢ The difficulty for PO is that, the near-default recommendation to mediate from SS places it in
the invidious position of appearing to say ‘no’ at each turn when, plainly, a number of these
simply do not identify issues which can sensibly be the subject of mediation
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© Subject to the facts of each case, Post Office is well-disposed to mediation but it is not
reasonable to expect it to accept responsibility for matters where there is no evidence to
support such a finding
B. Headline Position on Cases
There are a total of 10 cases for discussion, 6 of which are criminal cases. One further case (M021) is
inextricably linked to a criminal case (M003) and legal advice is to refuse mediation in this case too.
Of the remainder, PO considers that all of them are unsuitable for mediation but is prepared to
accept mediation in! , we do not consider this suitable for mediation on
Second Sight’s reasoning but we would mediate this as a means of avoiding debt recovery
proceedings against the Applicant. This is one of those cases in which the Applicant might have been
better off remaining outside of the Scheme. We should register a general reservation about the
likelihood of success in j"™if we eventually accept mediation.
Second Sight recommend all cases for mediation, save for one (M017), in which they changed their
recommendation following our response to the draft CRR.
Case Number Criminal Case ? Second Sight PO position re
mediation
Moo1 No but civil judgement I! I I Unsuitable
M003 Yes (false accounting— I Unsuitable
linked to M021) !
Moos No t Unsuitable — a face-to-
i I I face meeting should be
i I I offered instead —
i ' I accept mediation if
! I I necessary
M017 No ! Unsuitable
Mo21 No (but linked to M003 I! a Unsuitable — a face-to-
which is) i Legal Privilege I I face should be offered
i I I instead — accept
i I I mediation if necessary
M029 Yes (false accounting) I ! I Unsuitable
M035 Yes (false accounting) i Unsuitable
M052 Yes (theft and false i I I Unsuitable
accounting) i i
M062 Yes (caution for false H ' I Unsuitable
accounting) \ i
Mo65 Yes (false accounting) _I! II Unsuitable
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c. Individual Cases
™moo1
Applicant Lee Castleton
Advisor Aver (Emma Porter)
Branch loss £25,748.75
Non-criminal: Claim issued by PO for recovery of loss; matter fully defended and Applicant
Civil proceedings
issued Counterclaim for wrongful termination; judgement was given in PO’s
favour
costs award)
* Claiming conse
* No evidence pri
© Applicant's clai
e Bankruptcy case (so no debt has been recovered; none has been repaid including significant
* High profile case
been previously claimed for and dismissed) or are now time barred)
* Second Sight’s Draft CRR recommends that this case is suitable for mediation
quential losses of
ovided to undermine judgement in what was lengthy legal proceedings
m for losses would either be considered an abuse of process (as they have
Likely WG mediation p
osition Legal Privilege I
PO mediation position
Unsuitable for mediation
M003
Applicant Peter Holmes
Advisor Mc Keog & Co (Denise Jackman)
Branch loss £49,096.16
Criminal «Applicant convicted for false accounting following guilty plea.
e Applicant was sentenced to overnight home detention curfew for 3
months and ordered to pay £750 costs
e Applicant was not liable to repay loss because he was not SPMR —
obligation fell to SPMR (who is the Applicant in case M021)
branch
© Applicant has f
losses
© Case is linked to M021
e Applicant was Officer in Charge (OIC)
¢ Applicant was responsible for all elements of day-to-day operation and performance of
© Applicant had considerable experience (was SPMR elsewhere for number of years and
performed relief SPMR duties at various branches)
e Applicant pleaded guilty and was convicted of false accounting
‘ailed to provide any evidence that faults with Horizon were to blame for
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© Applicant has failed to provide any evidence that POL contributed or caused losses
* POwill not offer settlement therefore mediation could be emotionally frustrating for the
Applicant
* Applicant has claimed substantial consequential losses. PO does not consider the losses
claimed by the Applicant to be recoverable principally because PO had no direct relationship
with the Applicant as he was an employee of a Subpostmaster. PO does not consider that it
has in acted improperly or caused the Applicant the harm now claimed as consequential
loss.
* Internal note: the claim is time barred so no civil remedy is available to Applicant
Likely WG mediation position
PO mediation position
Unsuitable for mediation
Mo05
Applicant Jennifer O’Dell
Advisor Howe & Co (John Walker)
Branch loss £9,616.66
Non-criminal Civil proceedings suspended as case accepted in Scheme
e Applicant OWES PO money
© Wesee mediation as useful in this case, to avoid having to go after this debt in the Courts
e Applicant blames PIN pad issues and stamp stock adjustments for losses; she is critical of
support and training provided by PO
* Having operated the branch for eight years apparently without issues or concerns, it is
unlikely that lack of training led to losses
¢ Applicant has failed to provide any evidence that faults with Horizon were to blame for
losses
¢ Applicant has failed to provide any evidence that POL contributed to or caused losses
© POwill not offer settlement therefore mediation could be emotionally frustrating for the
Applicant
Likely WG mediation position
I WG likely to recommend mediation
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PO mediation position
M017
Applicant Baljit Sethi
Advisor Denning Solicitors
Branch loss £17,874.51 (but Applicant claiming a!
Non-criminal
¢ Applicant’s wife was SPMR and he managed the branch as well as being SPMR elsewhere.
e Applicant’s wife’s contract terminated due to not making good losses
e Atclosure of branch, discrepancy of £17, 874. 51 was revealed which was written off by PO
¢ Applicant claims final cash account showed) Legal Privilege !
Planned closure audit did identify this surplus but transaction error notices generated after
the branch was closed resulted in branch accounts showing net loss of £17,874.51 which the
Applicant was later notified of (therefore, PO not liable)
* The CRR appears to acknowledge that PO did not owe the Applicant for a surplus at the
branch
* POhas written off the outstanding debt
© There is no basis for claiming consequential loss
Likely WG mediation position
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PO mediation position Unsuitable for mediation
M021
Applicant Sunil Khanna
Advisor Howe & Co (Dipti Hirani)
Branch loss £46,049.16
Criminal / non- Not criminal although linked case M003 is a criminal case (conviction for false
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criminal accounting by Officer in Charge).
* No evidence of failure of Horizon or POL processes
* No other evidence to suggest POL responsibility
© Applicant had ‘hands-off’ approach to branch
* Second Sight acknowledge lack of evidence and Officer in Charge conviction but nonetheless
recommend mediation to achieve ‘closure’
e Applicant clearly contractually responsible
© He has repaid all losses
e Applicant believes his Officer in Charge should be liable to PO and seeks refund of monies
paid back to PO
* Remains serving SPM and conversation may be helpful in maintaining working relationship
Likely WG mediation position { Legal Privilege!
PO mediation position Unsuitable for mediation — but will offer face to face and
concede mediation if necessary
™029
Applicant Hughie Thomas
Advisor Aver (Emma Porter)
Branch loss £50,257.69 (of which £19000 was subject to POCA order) IRRECOVERABLE
now due to bankruptcy and period of limitation
Criminal Conviction for false accounting - custodial sentence and POCA order
e Very old case — few records on either side
¢ Bankruptcy case — PO had to write off £44K
* No evidence at all of PO responsibility whether through Horizon or otherwise
* Pleaded guilty to false accounting
© — Still managing to claim consequential losses of}
ge
* Mediation in this case would be futile and potentially only inflame Applicant
Likely WG mediation position
Legal Privilege I
PO mediation position Unsuitable for mediation
M035,
Applicant Josephine Hamilton
Advisor James Cowper (Robert Holland)
Branch loss £36,644.89
Criminal Applicant pleaded guilty to false accounting and was sentenced to a 12 month
supervision order; charge of theft was removed after assurances were given
that the monies would be repaid
© Debt repaid together with £1,000 costs
* Consequential losses claimed
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High profile case
Applicant’s claims would now be time barred
Second Sight’s Draft CRR concludes that this case is suitable for mediation
Likely WG mediation position
Legal Pi
PO mediation position Unsuitable for mediation
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M052
Applicant Wendy Cousins
Advisor Howe & Co (Steve Darlington)
Branch losses £13,759.38
Criminal Pleaded guilty to 11 charges of theft and 23 other offences
e NB: theft charges related to losses of £18,017.91 but Applicant
pleaded guilty to theft of £13,759.38
* Sentence given was 9 months imprisonment suspended for 2 years
with requirement to complete 200 hours of unpaid work (and repay
PO £13,759.38)
*® PO remains of the view that the loss in the branch was caused by the Applicant’s fraudulent
handling of benefit transactions
* POis not responsible for any portion of the loss at the branch
Likely WG mediation position Ee Legal Privilege i]
PO mediation position Unsuitable for mediation
M062
Applicant Gurmit Singh Gill
Advisor Howe & Co (Graham Cade)
Branch Loss £13,633
Criminal accepted a formal caution for false accounting
e Loss repaid by Applicant
e No evidence of failure by Horizon or POL processes — but exact cause of loss has not been
determined
* No evidence to suggest that Applicant is not responsible
¢ SS have offered no view as to the cause of the loss
Legal Privilege
* Case does not turn on a specific event or action — losses accumulated over long period o
time so no specific point to be discussed at mediation
© =POwill not offer settlement therefore mediation could be emotionally frustrating for the
Applicant
¢ Would be disproportionality expensive to mediate this case given chances of settlement are
low
Likely WG mediation position
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Legal Privilege
PO mediation position
Unsuitable for mediation
M065
Applicant Lynette Hutchings
Advisor Howe & Co (Neil Shanghavi)
Branch loss Total of £17,808.76 (2 branches)
Criminal Conviction for false accounting 24/08/12. 12 month community order, 120
hours of community service.
* Repaid £6993 losses at one branch, balance on other outstanding
¢ No evidence of Horizon or POL failure
e Responsibility for losses clearly with Applicant
© Applicant claims audit team instructed her to falsify accounts and claims money repaid
under threat of legal action
e = Applicant claims that insufficient training and Horizon to blame — evidence points
conclusively in other direction (eg more training provided than usual)
* Given opportunity to put forward her case against termination but did not attend
Legal Privilege
Likely WG mediation position
PO mediation position Unsuitable for mediation