POL00438030 - Official Sensitive and Subject to Legal Privilege - Post Office Group Litigation Update

Evidence on official site

POL00438030

POL00438030

UK Government Department
Investments

Date: 29 July 2019
Director General: Mark Russell

Lead Official: Stephen Clarke / Tom Cooper
Lead Official Telephone:/

[ Recipient To Note / Comment To Approve / Decide
Kelly Tolhurst x
Special Advisors x
Permanent Secretary xX

OFFICIAL SENSITIVE AND SUBJECT TO LEGAL PRIVILEGE
POST OFFICE GROUP LITIGATION UPDATE

Summary

1. POLis continuing to develop their litigation and settlement strategy. This will be considered
by Nigel Boardman (BEIS ARAC Chair) when he meets POL which we are expecting to
take place in late August.

Timing

2. Routine. We will continue to work with POL to finalise their litigation/mediation strategy
and arrange a briefing from them once the BEIS ARAC Chair Nigel Boardman has
considered it.

Recommendation

3. We recommend that you note the contents of this submission.

Background

4. Following your meeting with Tim Parker and Al Cameron on 24" June we met with the

POL Legal team and Al Cameron on 18" July to discuss their litigation and settlement
strategy. A detailed note from Herbert Smith Freehills (HSF) is annexed to this submission.

5. The headlines are that POL are hoping for an initial mediation in September/October to
gauge expectations but don’t expect to make meaningful progress towards settlement until
April/May 2020. This depends on the claimants’ willingness to participate as mediation is
a consensual process. At the moment the claimants don’t want to start mediation until the
Horizon judgment is received and the result of POL’s application for permission to appeal
the common issues judgment is known. This may delay the start of any mediation until
October/November.

for

Business, Energy
& Industrial Strategy

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UK Government Department for

Business, Energy
Investments & Industrial Strategy

7. HSF are also considering potential settlement structures and a strategy for dealing with
remaining sub-postmasters who did not join the group litigation but may seek to bring
claims.

8. There is still substantial work to be done before any decisions can be reached and any
strategy will need to consider how the return that the litigation funders will expect on their
investment is dealt with. The current estimate for this is £37m.

Next steps in the litigation

9. A case management conference took place on 22 July and it has been decided that the
trial in March 2020 will consider "measure of loss" questions only, based on assumed
facts. In brief terms, this means the Court will be asked to consider whether certain heads
of loss are recoverable in principle, subject to proof of breach and causation in due
course. The court has set a timetable for the steps the parties must complete to be ready
for this trial. Any agreed mediation can take place in parallel with this timetable.

10. The court also acceded to POL’s request that the test claimant selection process begin,
with the provision of proposed draft selection criteria for the test claimants on 4
December. This takes Post Office one step closer to a trial of test cases which is helpful
from Post Office's perspective.

Next steps

11. POL is continuing to develop their litigation and settlement strategy and we shall arrange
a further briefing once Nigel Boardman has met POL. We are having an internal briefing
for Nigel Boardman on 14" August and expect his meeting with POL to take place shortly
afterwards.

12. We have also established a BEIS, UKGI and HMT working group to manage potential
settlement.

Contributors
13. This advice does not have parliamentary handling implications.

Annexes
A. Herbert Smith note of 16" July 2019

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