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From: Andrew Parsons}
Sent: Wed 19/06/2019 5:
To: Ben Foatf
Ce: Andrew Hardin
Subject: RE: Board sub-committee on Thursday [WBDUK-AC.FID26896945]
Thanks Ben — understood and appreciate the guidance.
A
Andrew Parsons
Partner
Womble Bond Dickinson (UK) LLP
Y)) WOMBLE womblebonddickinson.com
// BOND DR
DICKINSON WV) iy
From: Ben Foat
Sent: 18 June 2019 19:43 .
To: Andrew Parson: ! Rodric Williams!
Cc: Andrew Harding + Tom Beeze: Hl
Subject: RE: Board sub-committee on Thursday [WBDUK-AC.FID26896945]
Thanks Andy — this is helpful.
V'll drop Al a note as he is on leave at the moment.
Just to set expectations, I expect that you will still get some challenge because, notwithstanding that email 1 % years
ago, even I have constantly heard since becoming involved that the claimants have not provided us anything on
quantum. In fact, I did call you out on it at the Board sub-committee so I do think you also need to consider that there
may have been some “liberal” expressions instead of “literal” expressions to convey the message that the claimants
haven’t properly particularised the claim. The intent was clearly not to mislead but to convey the challenge re
quantum but the effect is that the board hasn’t picked up on that. The take away is that I do think its a good reminder
that for all that we need to be judicious in what we say particularly on factual matters and challenge or clarify where
the message is not landing.
Appreciate the above message is challenging and perhaps difficult but Id rather you are appropriately briefed for any
challenge the Board Sub-committee may give.
Kind regards
Ben Foat
General Counsel
Post Office Limited
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From: Andrew Parsons,
Sent: Tuesday, June 18, 2019 2:32:15 PM
To: Ben Foat; Rodric Williams
Cc: Andrew Harding; Tom Beezer
Subject: Board sub-committee on Thursday [WBDUK-AC.FID26896945]
Ben, Rodric
As discussed, below is the email in which Jane passed the £224m number to Paula and Al — see the email at the
bottom (highlighted yellow). I've also flagged below where I believe that this same information was passed to Tom
Cooper.
To put this into a chronology:
e We received the first SOls in June 2017 for the first 198 Claimants.
© Between June 2017 and December 2017, more Claimants joined the group and the Court ordered the SOls be
re-done in a number of respects.
e@ We received the final batch of SOls in December 2017.
e WBD collated all the figures in SOls — this is where the £224m comes from — and passed this to Post Office on
19 December (see email attached).
¢ Jane then appears to have passed this on to Paula and Al on 28 January 2018 in advance of a board meeting.
I did not attend this board meeting so don't know what information was given to the board.
e@ I recall that Tom Cooper joined Post Office in around April 2018.
o Jane, Rod and I gave him a briefing on the litigation on 25 April 2018.
o I've attached the Speaking Note used by Jane that sets out the claim valuation figures - including the
£224m and passing reference to the SOls.
e@ On 10 May 2018, UKGI (Stephen Clarke) then prepared a briefing note for the minister (attached), which
makes reference to the high-water mark for the claim value being c.£250m.
© The first board meeting I attended was a sub-committee in May 2018, when our two QCs presented their
opinion on the Common Issues trial.
I'm raising this with you now because if I'm pressed on this point at the meeting on Thursday, then the above reflects
my understanding of the position. This of course does not align with the what the board understands so may cause
some tension and I will tread lightly. Some of the confusion may be because I did not start attending board meetings
until May 2018, so I'm not directly aware of what the board has been told historically.
Ben — I think you said that you might mention this to Al? If you do, please could you let me know what is the outcome.
Kind regards
Andy
Andrew Parsons
Partner
Womble Bond Dickinson (UK) LLP
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DICKINSON ) (in)
From: Alisdair Cameron
Sent: 28 January 2018 18:48
To: jane.macleod:
Ce: rodric.william:
andrew.parsons_
Subject: Re: Postmaster Litigation - Briefing Notes for the Board - CONFIDENTIAL AND SUBJECT TO LEGAL PRIVILEGE.
DO NOT FORWARD
mark.r.davies,
Thanks Jane. I note the point about where applicants might focus but various teams have focused on these
areas over the last couple of years, including Deloitte particularly. Is there any sense that we need to do
additional work to prepare?
On the application of costs it seems to me that if we believe we are defending the P.O. against inappropriate
and inaccurate claims then we should file for security of costs. If we don’t do so and we win the case and have
to bear those costs because the other side fades away into offshore mists, we will be held to have wasted
public money just as much as we do by defending the case, if not more.
We may come under public attack for defending but what else are we supposed to do? If we could settle this
case for a moderate amount and that would prevent other people making similar claims, enabling us to move
forward, we would give it serious consideration. If we had evidence that we had damaged people and taken
money off them, we would have compensated them years ago. I agree it will be difficult and public but what
options do we have? That is something I believe we can explain in public and we should be getting ready to do
so - unless someone is offering a better solution....
Thanks Al
Alisdair Cameron
Chief Finance & Operating Officer
20 Finsbury Street
London
From: Jane MacLeod
Sent: Sunday, January 28, 2018 12:24:20 PM
To: Paula Vennells; Alisdair Cameron
Cc: Rodric Williams; Ben Foat; Mark R Davies; Parsons, Andrew
Subject: Postmaster Litigation - Briefing Notes for the Board - CONFIDENTIAL AND SUBJECT TO LEGAL PRIVILEGE. DO
NOT FORWARD
Paula, Al
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As flagged on Friday, the following are my suggested speaking notes for the Board tomorrow. I’m available all day to
discuss if you have any queries.
Jane
Summary:
e 4week trial set for November to hear ‘Common Issues’ — namely to determine the correct interpretation of the
contract between POL and agents, and whether any additional terms should be implied into that contract.
Freeths believe a further 20 terms should be implied. The materiality and impact of these vary.
Process between now and November is to prepare for that trial. Disclosure hearing this Friday (2°) — there is
likely to be further adverse publicity as a result of this.
e Judge also set aside 4 weeks in March 19 however did not specify what that trial was to be used for. Both sides
believe that it will be almost impossible to have a substantive hearing during that period due to the dependence
‘on the outcome of the November hearing, the decision in which will not be available until at least mid December.
e We need to make a decision as to whether we want to pursue an application for security of costs.
e Contingency planning is about to commence.
Current Issues
Disclosure Hearing
e There is a Disclosure Hearing this coming Friday (2 Feb). This is a procedural hearing primarily on the scope and
timing of documents to be disclosed by Post Office.
e There are disagreements between Freeths and ourselves as to the volume and scope of disclosure:
o Despite initial encouraging discussions with Freeths, they have since reverted to requesting that
‘everything’ be disclosed immediately.
© In aggregate we have offered to provide some c.175,000 documents relating to Post Office policies and
processes, technical and operational aspects of Horizon (80,000), the 12 Lead Claimants, and the 27,000
documents reviewed by Second Sight which have already been provided. These documents therefore go
to the core issues in dispute in the Common Issues trial.
© Freeths approach, apart from running into potentially millions of documents, amounts to a fishing trip.
Tactically, they are keen that matters arising post appointment of agents should be disclosed, however
this goes further than the scope of the November trial. For example we have offered to disclose all
emails attributable to 9 ‘inboxes’ including relevant functional inboxes. Freeths have asked for disclosure
of all of 114 email accounts (NB — Paula this includes yours.)
© Post Office position reflects the new court protocol for disclosure, which protocol was designed to avoid
the problems presented by Freeths’ wide ranging requests.
e = If time and the Judge permit, the Disclosure Hearing on Friday may also consider how the 4 week trial window in
March 19, which was ordered by the Judge at the October CMC, will be used:
o As every major issue is in some way reliant upon the outcome of the Common Issues trial, both parties are
agreed that it would be impossible to prepare properly for any type of meaningful trial in the 4 months
between the Common Issues Trial (November ’18) and March ’19 — particularly as the decision in that
case is unlikely before mid-December, and there is a real possibility — given that the subject matter of
that trial is a matter of law (the interpretation of the contract) rather than fact, that the decision could be
appealed.
o Freeths have suggested the time be used for Mediation - the principle of which Post Office does not
oppose, however we clearly need to understand the objectives of the mediation, and as with, the original
Complaints Mediation Scheme, we would not agree to mediate any criminal case.
o Post Office has also proposed a detailed timetable for a subsequent ‘Lead Cases Trial’, which both sides
agree is necessary for the litigation to move substantively towards a conclusion - addressing questions of
breach, causation and loss, and avoiding the need for 562 separate trials. Freeths are resisting agreeing
to a timetable for this, however in our view it could not be heard before May 2020 at the earliest.
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Merits
An opinion on the merits of Post Office’s case will be sought once pleadings (Particulars of Claim, Defences and
Replies) for the Common Issues trial have closed in April 2018.
It is proposed that this be reviewed again in September 2018 once Witness Statements have been exchanged and the
full evidence to be used in the Common Issues is known. The outcome of these reviews will inform whether we
should consider settlement discussions — either across all or only some of the issues.
(NB — Al — we now have 2 QCs working on the case (Anthony de Garr Robinson and David Cavender). As part of
David’s on-boarding we asked him to consider how he would approach the case if he were advising the applicants.
This has given us an additional perspective into the way we should approach the case : based on the information
available to him, David flagged Horizon, training, agent appointment process and suspense accounts as the areas he
would probe most if he were advising the applicants).
Security for Costs Application
e Typically in civil litigation, the losing party makes a substantial payment towards the costs of the successful
party.
e = Therium Litigation Funding are funding the Claimants and as such, could be liable for Post Office’s costs should
Post Office successfully defend this litigation. Therium has sought to cover this risk through an “ATE” (After the
Event) insurance policy.
« However because a number of Claimants could be found to have acted dishonestly (indeed, some already have
convictions for fraud, false accounting and theft), there is a real risk that the insurers could avoid the policy,
meaning Post Office would have to look to Therium directly for its legal costs if successful.
e — Therium is however a hedge fund, domiciled off-shore with limited transparency of its financial standing, such
that we have no certainty that Post Office would be able, in practice, to recover its costs from Therium.
e To address this risk, the court’s procedures allow a party to apply for “security for costs”, i.e. for a specified sum
to be ring-fenced to cover costs.
e WBD has been working with Freeths for the last 18 months to try to address its concerns about Post Office’s
costs exposure and thus avoid the need for a security for costs application, e.g. by having the ATE insurance re-
drafted, and by requesting financial information about Therium.
e The concerns remain unresolved and we are therefore considering whether we should apply to the court for an
order for security for our costs. There are risks to doing this:
o in making the application, we will have to disclose the expected quantum of our costs which will be
material (£9m in the next financial year if we have 2 trials) giving rise to challenges as to whether this is a
good use of public monies — particularly so soon after the announcement of the new funding.
Additionally, the application may well generate adverse comment, e.g. claims that Post Office is using
legal technicalities and/or economic pressure to stifle the claimants’ claims.
o Asuccessful application will require Therium to provide security at a set level and form. Should Therium
fail to do this, not only would Post Office be unable to reclaim costs, there is a further risk that Freeths
may also be at risk on their costs. It is therefore possible that the Court itself could strike out the claim if
satisfactory security is not provided. There is also the possibility that Freeths would withdraw from the
action leaving the 560 applicants without legal representation.
o Should the case be struck out/ Freeths withdraw, all the issues arising out of the lack of confidence in
Horizon will remain unresolved and will continue to impact operational issues.
e Applications for security for costs should be made promptly. As we appear to have exhausted our ability to
resolve this issue directly with Freeths & Therium, we will therefore need to decide shortly whether to make the
application and if so, it should be filed within the next couple of weeks, resulting in a hearing on the issue being
heard during March (with all the resultant adverse publicity)
Contingency Planning
We are about to kick off a separate piece of work to consider:
what the impact would be if each/all of the implied terms supported by Freeths were to be upheld such that
contracts with all postmasters (whether or not party to the action) had to be interpreted as if that term
applied, and
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what action we could take (whether ahead of the decision or thereafter) to mitigate any adverse impact.
We will keep the Board updated on progress and recommendations.
BACKGROUND ISSUES — NOT FOR THE BOARD
Quantum
CCRC
Post Office continues to liaise with the Criminal Cases Review commission as it investigates 30 former Post Office-
led postmaster prosecutions.
The CCRC has appointed forensic accountants Grant Thornton to assist its investigations. The CCR has made
public the fact that it has instructed forensic accountants, but has not named the firm, whose identity should be
kept strictly confidential. We have provided GT with significant information and they will be meeting Fujitsu
during March.
e =A 25 January 2018 article in Computer Weekly reported that the “current piece” of forensic accountancy work is
nearing completion, which will be scrutinised to see if “it gives rise to any further lines of enquiry”, and that the
CCRC expects to provide an update to the postmaster applicants by the end of March 2018.
e¢ Based on our latest understanding of the CCRC processes, we do not anticipate the CCRC reporting on its
investigations before at least June 2018.
e Jane MacLeod
Group Director of Legal, Risk &
Governance
Ground Floor
20 Finsbury Street
LONDON
EC2Y 9AQ
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