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CONFIDENTIAL AND LEGALLY PRIVILEGED
POST OFFICE GROUP LITIGATION WOMBLE
Steering Group: 17 January 2019 BOND
DICKINSON
1.4
1.2
1.3
24
2.2
2.3
2.4
General Update
COMMON ISSUES
There have been no further developments from the Court on the Common Issues trial. We await
the Judgment. When the Judgment lands, decisions will need to be made quickly. Preparation
for this is underway:
1.4.1 Post Office have discussed this with UKGI (Jane / Rodric)
1.1.2 Portland has been instructed to prepare communications plans (Mark / Mel).
1.1.3 Contingency plans to mitigate commercial impact are in place (Angela)
1.1.4 Plans are in place for the distribution of the draft Judgment and subsequent
governance steps (see email from Rodric).
The following Noting Papers accompany this update:
1.2.1 Appeal processes.
1.2.2 Costs consequences.
These have been prepared to pre-brief the Steering Group on the topics that will need
consideration once the Judgment has been received. No decisions are needed on these at this
stage.
HORIZON ISSUES
The Horizon Issues trial is due to commence on 11 March 2019. All the current signs are that
this trial will proceed regardless of the outcome of the Common Issues trial.
The following procedural steps are still to be undertaken:
2.2.1 The Claimants are due to file their last round of witness evidence on 17 January.
2.2.2 The IT experts will be submitting supplemental reports on 25 January.
2.2.3 There is a Pre-Trial Review on 15 February at which the Court will check on the
preparations for trial and make orders about the conduct of the trial itself.
2.2.4 The IT experts are to produce a joint note (setting out areas of agreements and
disagreement) by 20 February.
There has been a recent meeting of each side's IT experts (as required by the Court) to narrow
points of dispute. No progress was made, with each side still being diametrically opposed on the
robustness of Horizon.
Post Office's Counsel team has commenced full preparation for trial. The team comprises:
2.4.1 Tony Robinson QC (lead Counsel)
2.4.2 Simon Henderson (a specialist IT lawyer)
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24.3 Owain Draper (a long-standing member of the Counsel on the team and who appeared
for Post Office at the Common Issues trial).
24.4 Rebecca Keating (junior Counsel)
2.5 A fuller briefing will be provided to the Steering Group on the merits and issues faced in the
Horizon Issues trial once Counsel's preparations are further advanced. This will likely be in mid-
February.
3. CMC ON 31 JANUARY / ROUND 3 TRIAL
3.1 At the end of the Common Issues Trial, the Managing Judge ordered a third trial be held starting
on 8 October 2019 for 4 weeks (the Round 3 Trial). The exact scope of that trial has not yet
been set but the Judge has given a firm indication that it should be the trial of all remaining issues
in 2 —4 of the 6 Lead Claimants chosen for the Common Issues trial.
3.2 There will be a CMC held on 31 January 2019 at which the Judge will make further orders in
relation to the Round 3 Trial. We have submitted our proposals to the Claimants for their
comments — attached to this paper. Our proposal is to hear two cases in October 2019 as per
the Judge's preference. Save for the one point flagged below, the remainder of our proposals
are orthodox Court process. They follow the now well-trodden path of pleadings, disclosure,
witness statements, expert reports and then trial, albeit conducted at express pace as is the norm
for this litigation.
3.3 The Round 3 Trial that we have proposed will allow the Court to explore issues of breach and
quantum that have not been looked at in the other trials. Insummary:
3.3.1 The Common Issues Trial will have set the legal foundation by determining the legal
obligations between the parties.
3.3.2 The Horizon Issues trial should determine, at a general level, whether Horizon is a
good and reliable IT system.
3.3.3 The Round 3 Trial will then apply the findings on the Common Issues and the Horizon
Issues to specific cases to determine whether or not Post Office has breached it legal
obligations, either through a defect in Horizon or otherwise.
3.4 The central questions at a Round 3 Trial will likely be:
3.4.1 What was the cause of a shortfall in a Claimant's branch?
3.4.2 Did Post Office provide adequate training and support?
3.4.3 Was Horizon responsible for any of the specific problems encountered by the
Claimant?
3.4.4 Was Post Office's termination of a Claimant's contract lawful?
3.4.5 What loss is recoverable as compensation?
3.5 These topics will take the litigation into areas that have so far only been lightly touched on with
the Judge, some of which may be difficult for Post Office such as the operation of its
reconciliation processes with clients and its suspense accounts. Ithowever also allows Post
Office to target some areas of weakness for the Claimants, namely that many of their claims
appear to be time-barred and the grossly over-inflated value of their claims.
3.6 The Judgments made at the Round 3 Trial will be specific to the cases heard and probably not
bind the entire group of Claimants. However, many issues in the Lead Cases may be analogous
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3.8
3.9
3.10
3.11
3.12
3.13
3.14
3.15
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to other Claimants' cases, allowing the parties to draw sensible predictions as to what may
happen in other cases, hopefully moving the parties closer to resolution.
We anticipate needing a large number of witnesses from Post Office and preparation is already
underway to identify and speak to possible witnesses. We will also need to call several new
expert witnesses, all of which go to calculating heads of loss. For example, the Claimants claim
that they have suffered psychiatric harm and so we will need to call medical experts to dispute
that claim or assess the extent of the injury.
The Claimants have not commented on our proposals so far or put forward their own directions.
We do not know what they intend to do save that they have indicated that they would like to hear
more than two claims. There is some force in this suggestion from the Claimants (see below) but
we believe that there is insufficient time in a 4 week trial to fully hear more than two cases.
LIMITATIONS IN A ROUND 3 TRIAL
In our view, it is unlikely that a trial of any combination of the Lead Claimants in October 2019 will
be sufficient to fully dispose of this litigation. Those Lead Claimants were selected to help
determine the Common Issues. No assessment has been undertaken as to whether those Lead
Claimants reflect the wide range of other factual matters and legal claims raised by all Claimants
— indeed there are some areas that are plainly not covered by the Lead Claimants, such as
Claimants who have previously agreed settlements with Post Office or have been convicted of
criminal offences. There will also likely be reoccurring factual circumstances that need exploring
that may not be covered by the Lead Claimants, for example a number of Claimants raise
complaints about the operation of ATMs in their branches but this does not appear to be a central
issue in the any of the Lead Claimant cases.
The Round 3 Trial will be useful in exploring the core issues of liability andloss asserted by many
Claimants and it will undoubtedly move the litigation forward. But the limitations of the Round 3
trial also mean that a further trial or trials will be needed if a settlement is not reached. In our
opinion, there needs to be an "Omnibus Trial" that strives to capture all outstanding matters in
this litigation. We envisage that this would be a trial that determines the full claims of around 12-
16 test cases so to fairly represent all issues in the wider Claimant group.
Any selection process for new test cases will involve an analysis of all 557 Claimants by both
parties, which will naturally be a time consuming process due to the number of cases which will
need to be examined. As part of this, we will need further details of the proposed clams from the
pool of test cases and the Claimants will likely need some disclosure from Post Office. Even if
this selection process were expedited, we believe that it would take at least 6 months. It would
then take at least a further 9-12 months to get prepared for trial.
We raised with the Managing Judge the above limitations in his proposed plan for the Round 3
Trial and floated the idea of an Omnibus Trial as an alternative way forward. He was not
supportive because it would have resulted in the next trial (after the Horizon Issues trial) being
delayed to 2020. He was insistent that there be a further trial in Autumn 2019 — hence the draft
Directions below that accord with the Managing Judge's expectations for his Round 3 Trial.
Nevertheless, we do not believe that the current proposed Round 3 Trial is the best way to
proceed. We would have preferred a later, but more comprehensive, Omnibus Trial but that is not
a viable option with this Judge.
Even if the Round 3 Trial goes ahead, we still believe that an Omnibus Trial will be needed in the
long run. Accordingly, we have proposed to Freeths that there be a selection process for
identifying new test Claimants and that this selection process is run in parallel with preparation for
the Round 3 Trial. If this selection process is not commenced imminently, it will not be possible
to obtain binding judgments on the test cases until 2021 at the earliest.
Pressing ahead with the selection process now is therefore important for the following reasons:
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3.15.1 The Managing Judge has made clear that he wants this litigation to move forward at
pace and so we doubt he would favour a 2021 trial date. This would likely result in the
Judge forcing through a smaller fourth and maybe fifth trial on shorter timetables that
will be wasteful of costs and actually probably take more time.
3.15.2 In the Common Issues Trial we selected three of the Lead Claimants and all three
performed badly in the witness box, which benefitted Post Office. This advantage was
secured through a careful selection process which we would hope to repeat.
3.15.3. The Claimants’ legal team has less bandwidth than Post Office and so may struggle
with managing the Horizon Issues trial, Round 3 Trial and the selection process in
parallel. This could put pressure on their funding and / or give rise to tactical
advantages.
NEXT STEPS
3.16 The greatest unknown for the Round 3 Trial is the Judgment on the Common Issues. The
Judgment will have a direct bearing on the Round 3 Trial. If the Common Issues Judgment is
appealed by either party, it may be that the Round 3 Trial cannot go ahead until the appeal is
heard. We are nevertheless proceeding for now as if Round 3 is going ahead because that is the
Managing Judge's expectation.
3.17. Once we have the Claimants’ full proposals for Round 3, we will be able to assess any points of
dispute to be heard at the CMC on 31 January and will return to the Steering Group for
instructions on how to proceed.
4. SECURITY FOR COSTS
44 Before Christmas, we raised the possibility of obtaining further security for Post Office's costs to
cover the Horizon Issues trial. The instructions from Post Office were to explore this with the
Claimants but that it was not ready to sanction a full application to the Court.
4.2 The Claimants’ current position is that security cannot be sensibly discussed until Judgment is
given on the Common Issues as that Judgment may lead to costs orders (see Noting Paper: Cost
Consequences) which may affect the security needed. There is some merit in this approach so
discussions are effectively on hold.
5. MEDIATION / SETTLEMENT
5.1 As per the Steering Group's instructions before Christmas, we proposed to the Claimants that
mediation is held once the Common Issues judgmentis handed down (in line with the Court's
order to do so). The Claimants are resisting this, seeking to move mediation back until after the
Horizon Issues trial. For the reasons stated in our earlier paper, we think this would be a missed
opportunity and so are gently pushing the Claimants to agree to mediate now.
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THE POST OFFICE GROUP LITIGATION
Claim Nos HQ16X01238, HQ17X02637 & HQ17X04248
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
BEFORE THE HONOURABLE MR. JUSTICE FRASER
On Thursday 31 January 2019
BETWEEN:
ALAN BATES & OTHERS
Claimants
-and -
POST OFFICE LIMITED
Defendant
DEFENDANT'S DRAFT SIXTH CMC ORDER
UPON the Court holding a Case Management Conference
AND UPON HEARING Leading Counsel for the Claimants and Leading Counsel for the
Defendant
IT IS ORDERED THAT:-
ROUND 3 - LEAD CLAIMANTS' TRIAL
1. There shall be a trial of all remaining issues in the cases of 2 Lead Claimants, listed for [20]
days, commencing Tuesday 8 October 2019.
2. [NAME] and [NAME] [choosing from the Lead Claimants Mr Abdulla, Mr Bates, Mrs Dar, Mr
Sabir, Mrs Stockdale and Mrs Stubbs] shall be the Lead Claimants for the trial ("Lead
Claimants").
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Individual Statements of Case
3. In respect of each Lead Claimant:
(a) The Lead Claimants shall file and serve individual Particulars of Claim by
4pm on AlMareh!2019, to include pleading out the relevant Lead
Claimant's case on limitation, if any. Where a claim for personal injury is
made, the Lead Claimant(s) shall file and serve individual Particulars of
Claim which comply with paragraph 4 of Practice Direction 16, including
attaching or serving a report from a medical practitioner about the
personal injuries which he/she alleges in his/her claim.
(b) The Defendant shall file and serve individual Defences and
Counterclaims by 4pm on A5/April’2019.
(c) The Lead Claimants shall file and serve individual Replies and Defences
to Counterclaims by 4pm on 9!May 2019.
(d) The Defendant shall, if so advised, file and serve individual Rejoinders
and Replies to Defences to Counterclaims by 4pm on 24’May 2049.
Further Individual Disclosure
4. By 24, JUR@!2019, in respect of each Lead Claimant:
(a) The Defendant shall disclose the documents set out in Schedule 1.
(b) Each Lead Claimant shall disclose the documents set out in Schedule 2.
(c) This shall be referred to as "Stage 4 Disclosure".
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5. By 26°April’2019, each party shall make any further requests for Extended Disclosure in
accordance with paragraph 6.5 of Practice Direction 51U.
(a) Any further requests shall be limited to documents that (i) are strictly necessary and (ii)
can reasonably be provided by the deadline for disclosure in paragraph [5(@)].
(b) By 8) Mayi2'049, the party from whom disclosure is sought shall agree or reject any
request, giving written reasons for any rejection.
(c) Any outstanding issues in relation to disclosure may be considered and determined at
the CMC listed in accordance with paragraph [29] below.
(d) Any disclosure pursuant to an agreed or ordered further requests shall be given by 28
Jiine 2049.
(e) This shall be referred to as "Stage 5 Disclosure".
Witness statements
6. The parties shall file and serve witness statements by 4pm on 2/August2019.
Single joint expert
7 A single joint expert shall be ay
ppointed by the parties in the field of accountancy to report on
the quantification of any! oss of revenue or profit arising from the suspension and / or
termination of a Lead Claimant's contract with the Defendant.
By 4pm on 42 July 2049 the expert should be agreed and instructed. If no expert has been
instructed by that date, further directions in this regard may be given by the Court at the CMC
listed in accordance with paragraph [80] below.
9. By 4pm on 23/AUgust 2019 the expert will report to the instructing parties.
10. By 4pm on
19 the parties may put written questions to the expert.
141. By 4pm on 20/Sé@ptémber 2019 the expert will reply to the questions.
12. Either party may call the expert to give oral evidence at trial.
13. A copy of this order must be served on the expert by the Lead Claimants with the expert's
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instructions.
14. The expert may apply direct to the court for directions where necessary under CPR r.35.14.
15. Unless the parties agree in writing or the Court orders otherwise, the fees and expenses of the
single joint expert shall be classed as individual costs in this litigation and paid by the parties
giving instructions for the report equally.
Individual experts
16. Each party has permission to rely on their own expert in each of the following fields:
(a) _ IT in relation to the operation and accuracy of the Horizon system ("IT experts").
(b) Business and / or property valuation in relation to the quantum of any claim for loss of
investment or diminution in capital value of any asset ("valuation experts").
(c) Medicine in relation to any claim for personal injury ("medical experts").
(d) I Employability in relation to any claim for loss of revenue, profit or earnings arising from
personal injury or reputational harm suffered bya Lead Claimant ("employability
experts").
Any Lead
examined by the Defendant's medical expert.
17.
18. By 412)JUIy/2019, the parties’ experts of like discipline are to commence their meetings and
discussions pursuant to CPR 1.35.12, for the purposes of both CPR r.35.12(1)(a) (identifying
and discussing issues) and r.35.12(1)(b) (where possible, reaching agreed opinion on those
issues). Those discussions shall continue as necessary.
19. By 4pm on 23/AUgust/2019, the Lead Claimants shall serve any expert reports on which they
intend to rely, save in relation to their medical expert where each Lead Claimant only has
permission to rely on the expert report served with their Individual Particulars of Claim.
20. By 4pm on 6 September 2019, the Defendant shall serve any expert report on which it intends
to rely.
21. By 4pm 20: 2m 9, the parties’ experts of like discipline shall have discussed their
respective reports and produced a joint statement pursuant to CPR r.35.12(3), identifying the
r2i
issues:
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(e) upon which they agree; and
(f) I upon which they disagree, together with a summary of their reasons for disagreeing.
PREPARATION FOR FURTHER TRIALS
22. To prepare for future trials after the Round 3 Trial, the parties shall take the steps below to
identify a pool of potential Test Claimants ("Test Claimants"). The start date and length of any
future trial(s) and the number of claims to be heard thereat shall be determined at the CMC.
listed in accordance with paragraph [82].
23. The Test Claimants shall be selected so to reflect, as far as reasonably practicable, the
material factual circumstances and legal claims raised by the wider group of Claimants in this
Group Litigation.
24. By 4pm on [8/Mareh! 2019], each party shall serve on the other a document setting out the
features and characteristics which the Test Claimants should reflect to comply with paragraph
[23] above ("the Selection Criteria").
25. The parties shall discuss and seek to agree the Selection Criteria. By 4pm on
either the agreed Selection Criteria shall be filed with the Court or the parties shall notify the
Court that the Selection Criteria will need to be determined at the CMC ordered in paragraph
[29] below.
TE ee
Claimants who they
26. By 4pmon [ 12019], each party shall produce a list of up to [/
propose could be Test Claimants in line with the agreed or ordered Selection Criteria
("Shortlisted Test Claimants").
27.
(a) Each Shortlisted Test Claimant shall give disclosure of the documents in Schedule 3.
(b) I The Defendant shall give disclosure of the documents in Schedule 4 in relation to each
Shortlisted Test Claimant.
(c) This shall be referred to as "Stage 6 Disclosure".
28. The parties shall u:
[18"Oetober'2049), the parties shall notify the Court of the agreed list of Test Claimants or
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inform the Court that the matter will need to be considered at the CMC ordered in paragraph
[82] below.
CMCs AND OTHER HEARINGS
29. There shall be a CMC listed for 1 day on [17)May/2019] to address any outstanding matter in
this litigation, including those in Parag s 5 ( losure), I , te 7
30.
‘th icati
31. There shall be a Pre-Trial Review (for the Round 3 - Lead Claimants Trial) and CMC listed for 1
day in the week commencing [fOetober 2019).
ote Tt 119 is the g n
32. There shall be a 1 day CMC listed during or immediately after the Lead Claimants Trial at
which the Court may:
(a) _ resolve any outstanding disagreement on the selection of Test Claimants;
(b) give directions for future trial(s); and/or
(c) address any other outstanding matter in this litigation.
33. The parties shall inform the Court 7 days before any CMC as to whether the CMC is required or
should be vacated.
34. The Claimants and Defendant shall lodge skeleton arguments and draft order(s) by 12pm, 2
clear days before any CMC, setting out what order(s) are sought by them at the CMC.
35. The parties to liaise with one another and co-operate regarding documents that it will be
necessary to put before the Court for any CMC, such documents to be contained in a separate
hearing bundle, and to be lodged by 4.30pm, 2 clear days before the CMC.
GENERAL
36. The CMC in paragraph [29] shall also be a Costs Management Conference at which the parties
budgets shall be reviewed in accordance with the Costs Consent Order dated 27 April 2018.
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37. Any disclosure to be provided under this Order shall be provided on the basis of a reasonable
and proportionate search.
38. Costs of this Order and the Sixth CMC are common costs in the case.
39. The parties shall have liberty to apply in respect of any provision in this Order.
Dated this day of January 2019
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